Private Advisory Group

On the business side, he’s devoted considerable energy to the development of electric vehicles–first an electric bike, then cars–with mixed bottom-line results. He’s described the working on the start up of the electric bike venture as harder than his last two years at Chrysler, but he’s gained greater satisfaction doing business in a direct, more immediate way that he never could as head of a major manufacturer. “I’ve had my 50 years of building, and quality problems and the manufacturing and assembly line, and a zillion purchasing buyers, and all the unions. I’ve had enough of that,” Iacocca told the Los Angeles Business Journal.

For example, less than an hour after meeting a new supplier for the first time, Iacocca was ready to cut a deal–without the corporate committees, board of directors, or shareholder discussions that followed him at Chrysler. For him, retirement also meant conducting an entrepreneurial life as a small-business owner, something he never did in his pre-retirement years. From an advanced planning team perspective, Iacocca’s mix of philanthropic activities, profit-making business ventures and the management of his personal portfolio, clearly represent a very active retirement life that requires analysis, projections, and modeling–not just creating a lifetime income stream.

It’s Not the Money
The findings of The New Retirement Survey, conducted for Merrill Lynch by Harris Interactive in collaboration with Age Wave in 2005, about retirement attitudes among a broad spectrum of Americans offer some surprising insights into the importance of creating the appropriate retirement “ecology” to achieve happiness. For those age 60 to 70, for example, the three most important reasons to work during retirement have nothing to do with money: to keep mentally active, to keep physically active, and to keep connected with others. Also, having a retirement career seems to drive a positive retirement experience. Those who work part-time on their own terms find the retirement better than they expected, and are more satisfied than either those not working or those working full-time.

For those planning on working during retirement, most want to pursue a different kind of work experience, such as Lee Iacocca. Of this group, the majority has taken some steps to prepare a new career by talking with others, researching opportunities, attending training classes, examining the financial issues, or other activities. Becoming a consultant is the most popular choice for 60-70 year olds.

Other key findings include:

• Having a “retirement career” is part of an ideal retirement scenario for a majority of interviewees.
• Approximately half who plan on working expect they’ll never stop completely.

The ideal form of working during retirement is alternating periods of work and leisure, which aligns with those seeking a consulting career or similar project-based employment. Sharing and passing on knowledge ranked high on the preferences of boomers.

 

The transition from pre-retiree stage with a focus on career and accumulation of assets to the retirement stage with a redefined self in terms of career and finances can be bumpy for some. Someone like Iacocca spent his executive years calculating risks vs. rewards for the companies and for himself. When he starts a new company during his retirement such as Olivio to distribute olive oil products–and then donates all profits to his diabetes foundation, he’s satisfying both his entrepreneurial instincts and his emotional need to contribute to the greater good.

It’s this personal blend of new emotional and career needs that advanced planning teams need to understand before creating any lasting retirement plans for affluent clients.

lewisschiff@advancedplanning.org.

---

Lewis Schiff is the principal of Advanced Planning Group, a private wealth specialist for advisors and their top clients. His latest book, The Middle-Class Millionaire, was published in February 2008.