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How to Plan for a Long Retirement

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As life spans grow, a small subspecialty of financial planners address multiple stages of old age.

When Cynthia Hutchins started her career as a financial planner in the 1980s, the concept of “retirement” was simple and straightforward.

Most of her clients envisioned a few years of leisure after their full-time careers ended, with a pension, Social Security and perhaps a bit of savings providing steady support.

“When my grandmother retired, as an example, if you lived into your 70s that was considered to be a really good, long life,” Ms. Hutchins said recently over video chat from her home office outside Baltimore.

As the years went on, she noticed a shift in her conversations with clients at Merrill Lynch, where she worked as a retirement specialist.

The defined-benefit plans their parents had relied upon were fading away, replaced by self-funded schemes that demanded a great deal more planning on the employee’s part.

What’s more, people no longer imagined their so-called retirements as a few golden years of golf and grandchildren. The 20th century added more years to life expectancy than any era of human history before it. As the new century loomed, Ms. Hutchins’s clients were grappling with decisions that previous generations simply hadn’t lived long enough to face. They were trying to plan for decades-long stretches that included multiple phases: leaving work to care for an aging parent, a second career, the possibility of needing full-time care themselves.

Even in her own family, Ms. Hutchins saw how gains in life expectancy were outpacing the plans people made for themselves. Her grandmother died at 96, four decades after retiring from the Social Security Administration at age 55.

“She lived 41 years in retirement, and it hit me that had she known she had 41 years, she would have planned totally differently,” she said.

That realization prompted a career shift. Ms. Hutchins, 61, is now the director of financial gerontology at Bank of America Merrill Lynch, a role in which she educates the firm’s nearly 19,000 financial advisers on working with clients across all stages of life.

The training she has developed helps advisers understand the complexities that can accumulate as the years pile up: how to simultaneously finance children’s college education and parents’ in-home care; when to bring in adult children or other family members to collaborate on financial decisions; how to recognize if a long-term client is being financially exploited, or experiencing cognitive changes that are influencing their decision-making.

“We used to live what I would call a linear life: We were born, we went to school, we got out of school, we got a job, we got married, we had kids, we retired, we died,” Ms. Hutchins said. “What it’s become now is a series of different life stages that we didn’t used to have to plan for.”

Ms. Hutchins was named to the newly created role in 2014, shortly after obtaining her master’s degree from the University of Southern California’s Leonard Davis School of Gerontology. At the time, Merrill Lynch (which had not yet merged with Bank of America) was the first major bank to employ a financial gerontologist, and is still the only major one to use that title.

Being the first to hold this role gave Ms. Hutchins freedom to shape a subspecialty that is small but growing in significance.

Maria Henke, the senior associate dean at U.S.C.’s School of Gerontology, said, “We don’t really have a definition yet of what constitutes a financial gerontologist, because we don’t really have a hard and fast rule about who can call themselves a gerontologist in general.”

In contrast to the medical specialty of geriatrics, which focuses on the physical concerns of the later stages of life, gerontology is a multidisciplinary field that includes the social and psychological implications of aging and longevity.

Along with faculty members at U.S.C.’s gerontology school, Ms. Hutchins created a longevity training program for Merrill Lynch financial planners. Advisers who completed the course received a certificate from the university and credit toward their profession’s continuing education requirements. (Bank of America Merrill Lynch temporarily paused its longevity program last year to update the course materials, Ms. Hutchins said.)

Many advisory firms that address these issues do so as part of their retirement income specialty services, said Russ Hill, chairman and chief executive of Halbert Hargrove Global Advisors, a firm based in Long Beach, Calif.

“I think the broadening of the term from ‘retirement income’ to ‘financial gerontology’ is inevitable,” Mr. Hill said. “It’s way more than income. We know that the health span of older clients is critical. What are their social connections? What is their environment? All those are nonfinancial things, but they’re incredibly important to the well-being of people at all ages, particularly older ages.”

Doctors concerned with a patient’s longevity don’t just look at vital signs, but also ask about the social factors affecting their patient’s health, like access to social support, adequate food and transportation to appointments.

Similarly, financial planners who have completed training in longevity know the questions to ask to make sure that their clients are on track for successful financial outcomes in older age, and that they will be comfortable starting necessary but potentially difficult conversations about long-term care, health and end-of-life plans.

This has not always been an easy sell among financial professionals more comfortable with spreadsheets than soft skills, Ms. Hutchins said.

“We originally got a lot of pushback,” she recalled. “The typical response was: ‘I’m an investments person. I’m not a psychologist. I’m not going to do those things.’”

Discomfort around issues of aging isn’t limited to the financial services industry. The number of people in the United States ages 65 and older is growing, as is the share of the population they represent. Yet many companies have struggled to figure out how to market their services to older customers in a way that isn’t condescending or out-of-touch.

The financial services sector deserves credit for at least trying to connect with the reality of older clients’ lives, said Paul Irving, chairman of the Milken Institute Center for the Future of Aging.

“The financial services industry has been struggling with this, in a good way,” Mr. Irving said. “I’d like to see other domains struggle in the same kind of way.”

The industry still has work to do. The one-size-fits-all nature of many commercial financial products fails to account for the variability in people’s lives, Mr. Irving said, and being able to plan for retirement at all is still an unattainable luxury for many people in the United States.

For financial planners, however, ignoring the needs of older customers is a luxury they can’t afford.

“They’re seeing that this is the way they have to go, or they’re not going to go at all,” Ms. Hutchins said. “You’ve got to give the client what they’re asking for, and they definitely are asking for a deeper conversation than just, ‘What’s the best investment for me?’”

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