Tuesday, July 8, 2014

Retirement, control and GAD.

Entering the fray of who, what and why of retirement advice.

If you don’t know what GAD means, you clearly have not been following OPT (the Oscar Pistorius trial). It’s not an admission I make likely, but at times I have been absorbed by the proceedings. In the process I have learned something: that I most likely suffer from GAD, which, according to evidence led by an esteemed forensic psychologist, means Generalised Anxiety Disorder.

On reflection on my own three score years and ten, nothing seems more designed to aggravate GAD than age and retirement. I am loathe to ruffle the feathers of old and new colleagues, but much of the hullabaloo that has featured in spats on the subject between writers and advisers that I deeply respect, has simply been missing the point. The fact is both are right and wrong. To say (see article here) that age and experience are essential to retirement advice ignores that old quip: “Wisdom comes with age, but sometimes age comes alone.” As this article here points out it is stretching a point to say that the young are not qualified to give retirement advice.

Nevertheless, most of the interchange has been enlightening, even to someone whose life’s cup has been filled to overflowing with not always pleasant elixirs. (Don’t most geriatrics say that?). The fact is that retirement advice has so many facets that it takes a multiple of disciplines to be comprehensive – and then mostly in a specific case at a specific time.

It was one of the requirements that made me stay away from specialising as a personal finance writer. Generalisations in these matters are extremely dangerous and disclaimers aside, I don’t think I could live comfortably with someone investing his life savings in a unit trust on the eve of a market collapse, or a terminally ill individual pouring everything into a single premium RA simply because I paraded their merits on air or in print. The esteemed Mervyn King added to this sensitivity when, after being a guest on our TV Business programme, Diagonal Street, he advised me to include a disclaimer in the closing credits.

Valid advice can be informed by research, others by experience, but most simply by common sense – albeit not so common. The best advice I have ever been given said simply: “follow your heart, but make sure it has a good road map.” As long as you are sure and comfortable with where you want to go, the drawing of this map can and should be informed by many contributors, including young and old, expertise and experience.

Providing for retirement is very different from preparing for it. It was a distinction I tried to draw in my own modest and earlier contribution to the subject in the three part Moneyweb series on the financial issues; the living issues and life issues of retirement. Financial issues are clearly the domain of experts where age makes little difference. The living issues, such as where to live, health, reducing attachments and clutter are best informed by experience. The life issues relating to one’s mental preparedness and achieving serenity can be informed by both expertise and experience, and are seldom part of an investment adviser’s or a journalist’s tools.

At the risk of generalising, I would argue that the single, biggest desire of a retiree is serenity. Serenity is simply the absence of anxiety, a state implying a multitude of attributes, attitudes, behaviours, resources and actions, for which advice can never be obtained from one source, least of all from an adviser’s theories or the journalist’s keyboard. What most find difficult to accept or act upon, is that serenity is far more self-defined and self-created than externally created. The best adviser that I have come across on this issue is Viktor Frankl and his work “Man’s search for meaning.” Read it soon, or read it again!

A critical element of anxiety or its absence is our deep-seated desire to control – both people and circumstances. Understanding this and understanding ourselves to acknowledge and adjust this trait takes hard work, but the results are far more rewarding than anything else you have ever done to “prepare” or to “provide”.

It is critical for the retiree. Here I can talk from experience, not because I have achieved the serenity of a floating guru in the Langeberg, but more from the blunders I made in trying to achieve serenity through control. I will share these with you in future because many of the fairly common things I did, including following the advice of others, led to awful unintended consequences which I could have avoided with a deeper understanding of the self.

Money is clearly at the centre of control. The more we have, the more we feel we have a grip on life. If that is your belief, you will most likely get caught in the hedonic treadmill of never having enough and blowing your serenity apart in trying to gather more or preserving what you have. You also run the risk of being totally blind-sided by those events this article warned about and which will leave you far more desperate and anxious than if you had reduced attachments in the first place.

At one or other point you have to accept, (like I did rather unsuccessfully with my own touch of GAD) that you are in a race between provision and longevity. Sometimes that provision irrationally extends to the financial comfort of more than direct dependents and often enough too, that legacy creates either rancour or delight at your passing.

As a retiree you will experience many things that rob you of perceived control. They include increasing frailty and a greater sense of vulnerability, the increasing loss of friends and acquaintances, a greater awareness of your mortality, and changes in many things, including your job and sense of purpose that you clung to as anchors in your life. You cannot provide or plan for most of these things, let alone expect sound advice on doing so.

The only answer lies within you, living in the moment, and avoiding your day to day experiences becoming locust food. Rich man, poor man, beggar man, thief -- we all have the capacity to do that.

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