What if your clients live to 142?

Remarkable advances in life expectancy and major differences in generational outlooks are changing how financial advisers will help their clients with retirement, according to Joseph Coughlin, Ph.D., Director of the Massachusetts Institute of Technology Age Lab.

“Your industry is on the forefront of a new frontier to creating something entirely different,” Dr. Coughlin told assembled advisers at IMPACT 2015, noting that half the babies being born now in the developed world will live to be 100, and some researchers say that living to 142 will be the new normal.

“This changes everything,” he said, adding that life after retirement “is your new business.” The value advisers will need to bring is how to help clients have the money and the imagination to fund life after the traditional retirement age — a period that might span 30 years or more.

Mr. Coughlin said that many current Baby Boomers are not planning on a traditional retirement: Some 40% of people over 50 say they intend to keep working. And companies concerned about the lack of people prepared to do the jobs now held by older workers may pay their employees a lot to stay on the job in at least some capacity. He noted that many Baby Boomers are interested in working part-time or in several different kinds of jobs. They have this in common with Generation Y, which refers to this as “working in gigs.”

In addition, Mr. Coughlin said, extended life expectancies mean that there are many generations with which an adviser must interact, and those generations have very different ways of viewing the world. For example, a study group was asked, “Where did Kennedy die?” Older people answered, “Dallas.” But younger people said, “Off Martha’s Vineyard;” their reference point for “Kennedy” was John F. Kennedy Jr.

When most Baby Boomers started their careers, they expected to stay at one company and move up the ladder. But younger people have no such expectation, nor do they want to stay in one place. Mr. Coughlin said that in general, Boomers see work as exciting and necessary, Generation X sees work as a contract for their talents, and Generation Y sees it as a way to find personal fulfillment.

Interacting with the generations is also different, he said. Boomers like formal meetings with an agenda that yields action items. Generation X prefers brief meetings focused on tasks. And Generation Y is highly collaborative, so any information they receive needs to be vetted by their friends and family.

Younger people also are comfortable with technology, typically preferring an email or a text to a phone call, for example. And they are much more likely to have done their own research online before talking with an adviser.

But the generations also share several traits. For example, 70% of Americans of all ages say they have stress that causes them physical issues. In general, the most-stressed people are those between 37 and 57, who are dealing with issues involving money, family and health. These people need help with life now; they often are too overwhelmed to even think about retirement.

People also have a lot of clutter and noise in their daily lives from smartphones, websites and information bombarding them from all sources. As a result, Mr. Coughlin said, “Advisers must first get their attention.”

In dealing with people under stress — which Mr. Coughlin called Generation S — advisers need tactics designed to ease rather than add to stress. For example:

• Keep communication and meetings short and easy. It might be difficult for clients to come to the adviser’s office, but they might be able to do a shorter Skype or FaceTime meeting.
• Keep it fun, even when delivering important messages. People under stress don’t want to meet with their adviser and be told things that are going to stress them out further.
• Take small steps. Don’t expect them to sit down and create a retirement plan and then stick to it. Instead, help them make small changes in their lives that might ease some stress and will help them begin planning for retirement.

“We have to find ways to get small chunks of information in a constant stream,” Mr. Coughlin said. He suggested that advisers bring in other experts to help clients understand and manage all the parts of their lives.

The most important thing is to listen to what clients are concerned about and what they want. That way, Mr. Coughlin said, advisers can “cast a new story of what retirement can be.”

This article originally appeared as a special section in the December 14, 2015 issue of InvestmentNews.