Jack Sharry: Everyone, thanks for joining us on this week’s edition of WealthTech on Deck. We have a very special show today, I have the privilege of speaking with Ken Dychtwald. Ken is founder and CEO of Age Wave is renowned psychologist gerontologist researcher, speaker and author of the 90 books Ken has published the seminal work and best seller he wrote 99 called age wave provides Ken with a rare distinction of predicting the future and being spot on accurate over many decades. Today’s discussion is part of a series we’re doing in collaboration with Ken Cella, a principal at Edward Jones. He oversees 90,000 advisors there and Ken Of course, oversees Age Wave. So, over a series of podcasts, we will discuss Dr. Dychtwald’s research that he was commissioned to produce for Edward Jones. We spoke with Ken cell in an earlier episode about why Edward Jones commissioned this research, and what they’re doing about it, as every show is looks to transform how they serve their clients and advisors in delivering advice and guidance. So Ken Dychtwald while welcome to WealthTech on Deck.
Ken Dychtwald: It’s great to be with you, Jack. Looking forward to this discussion.
Jack Sharry: Yeah, I think we’re gonna have some fun. So Ken, I’m sure most of our audience is quite familiar with your work. It has impacted our industry for as long as I’ve been around, we are of similar vintage. And it really has impacted our industry in fundamental ways for a very long time. So let’s start with you providing a very high level explanation of your work for those who somehow may have missed it.
Ken Dychtwald: Sure. I was born in 1950. I grew up in Newark, New Jersey, I initially went school, be a physicist, found myself more interested in the human potential, and the humanities and switched over to psychology where I got my doctorate. But this work began for me in 1974, I was asked to head up the first preventative health research project with the elderly, in the Americas. And before I knew it, I became really captivated by older people. And then I became even more captivated by aging, you know, how do we get from here to there. And then I served as an advisor to the Office of Technology Assessment in 1982. And we spent two years looking at demography, how America and the modern world was going to be growing older. And that just kind of blew my mind. And what struck me was that pretty well, everything about our lives had been shaped around the form and fit of youth. But due to declining fertility, the aging of the boomer generation and rising longevity, everything from the auditory range in our telephones to the way people have to save for a longer life was going to be transformed. And so my wife and I set up age wave in 1986. We’re proud to say we’ve been in business for all these decades, and we’ve grown and morphed and had our share of successes and worked with about half the Fortune 500, from everything from financial services, to health care, to insurance to automotive to Centrum silver was our idea. So we’ve been kind of banging around in this territory for quite a while. And also trying to imagine not just what’s the future gonna look like? But how do we need to change our products and services now, for the 50 and 60 and 70 and 80-year olds that have new appetites and demands then their grandmas and grandpas did. That’s great. So let’s talk a little bit about the research and the work that you’ve been doing with Edward Jones, I know you weren’t many competitors of frenemies of Edward Jones people in other parts of our industry. And you’ve really looked at this from all angles. So and I’ve had an opportunity to read some of your research and you and I’ve been together on a few occasions where I’ve heard your you speak about where you’re doing. So there are two key areas that I’d like to dig in on Have you talked about first let’s talk about the five forces shaping the new retirement journey. And then after that, we’ll talk about the four pillars of the new retirement. So let’s start with the five forces shaping the new journey new retirement journey that’s greater longevity, baby boom becomes a retirement wave. Need to match healthspan and lifespan demise of the three-legged stool for funding retirement and COVID-19. So Have at it tell us about the five. All right, let me hit all five, sometimes demography and psychology and medicine and economy bang together. And out of that rises up a whole new stage of life for a whole new set of circumstances. And I think we’re at that point now. And let me break each one down in a kind of a quick way. First of all, throughout 99% of human history, the average life expectancy was under 18. And I know people are gonna think that’s absurd. There have always been 70 and 80-year olds, and there have been not very many, most people died young. And so people in the 1850s weren’t saying, gee, Honey, what are we going to do during our 25 years in retirement because you weren’t going to have 25 years in retirement? If you live to retirement at all. More and more people are beginning to realize they’ve seen them. Mom or dad or an older brother or sister living to 80, or 90 or 100. And they’re beginning to think, Whoa, wait a minute, I might live a longer life than I ever expected. Retirement may not be three or four years, it might be 30. How much money am I going to need? What am I going to do? Who am I going to be? So the first point is greater longevity. Second point is we have a whole new generation, rolling into their later years, that our moms and dads generations kind of viewed retirement as a time to wind down. It was a period for rest and relaxation, more akin to a extended vacation. Boomers are a spunky bunch, they want to go back to school, they want to if they’re widowed, or divorced, fall in love again, they want to reinvent themselves and get a load of this. 72% of them said they want to work in retirement. But they may not want to work as hard. But they may even want to try something new, maybe become an entrepreneur at the age of 65. So we have a boomer generation, who are self-indulgent, self-demanding, self-directed, very meritocratic. No, they think if you try hard, you can make it and they’re not looking at retirement the way previous generations did. Third, got a little bit of a problem. We’ve created an extended lifespan, let’s say the number of years that the average person can live to right now it sits at about 77-78, come back a little bit during COVID, it was up to 79. But there are 37 countries in the world that live longer than we do in the United States. So considering all the money we spend on health care, we do a pretty bad job of it. But more important, Jack is the fact that our health spans the number of years, we will live in vibrant health. without suffering and pain and money having to go out the door caring for our illnesses, is not very long at all. It’s only in the early 60s. And so the average American can expect to spend around 12 to 15 years in a state of failing health, which is really expensive. In fact, most financial advisors have never stopped to think that the average couple from retirement date till the end of their lives, out of pocket health care and long-term care costs are $456,000. On average, if we lived long lives with more health, we’d be more productive, we’d be happier, we’d be able to work longer, and we wouldn’t have to spend down our wealth and our and our family’s inheritances. Fourth, when I was growing up, we always heard about the idea that in retirement, you know, you’d be supported by a three-legged stool, your company would be contributing to your pension, there’d be government programs in your personal savings. What’s happened since the late 1980s Is that more and more companies are not guaranteeing pensions, you of course and your listeners know this, that people are being told, you know, it’s kind of a do it yourself thing, make sure you max out your 401 K and have there be no leakage. And also there’s going to be increasing strain because of the boomers heft in the years to come. And they’re saying that Social Security is going to hit a tipping point by 2034. And even before that probably a lot of young people are going to say, if we’re not going to see much of this, why are we paying it in? So it’s going to become a livelier discussion point. Even if it’s not, we’re going to see that more and more of the responsibility for people funding their longer lives is going to fall on the individual. And most of us are not trained or skilled, or have the kind of wherewithal to know how do we manage our money over the course of a long life. So that three-legged stool is kind of becoming wobbly. Fifth is what’s happened during COVID. First of all, during COVID, we saw that about 70 million people decided that they were going to change their date of retirement, mostly moving it back because people realize Whoa, with between COVID and inflation and kind of fear. People said I may not have the money to be able to retire when I was thinking I would. And also on the flip side there was a silver lining that during COVID We all kind of had a near death experience. You know, all of a sudden, we were told to kind of go to your room and think about what matters in life. And what we’ve seen from the Edward Jones and age wave research is that a lot of people said number one, I think I need some financial help. There’s not a do it yourself project. But even bigger was people realizing that what matters most in life is not amassing enormous amounts of wealth, but rather having the resources so that you could enjoy your time with your family and your friends and doing the things that feel purposeful to you. So those five changes, anyone by itself would be paradigm shifting, but when you add them all together, what it suggests is that the average person is beginning to think about their retirement in very new in different ways, and they want their financial advisor to be in sync with them on those considerations.
Jack Sharry: And one of the things I’ve observing, studying, reading about this phenomenon, the beginning of COVID, a lot of people retired early, at least that’s, those are the reports because they fed 401, k’s and life is short, and let’s go make the most of it. And then as code continued, and now, I’m not sure we’re quite in post COVID. But I guess we’re further along, people going back to work. And there’s a lot of this back and forth of retire and not retire. Of course, they saw their 401k is get chopped pretty severely recently, frankly, their longevity, I think they’re coming to understand they’re going to be living longer, and they’re going to manage it all the ways that you’ve just described. So talk a little bit about that back and forth. During COVID. I was quite fascinated by that. We started off I like, well, we’re gonna retire early and live the life we want to live. And then I’m not tracking and what inflation hits like, boom, if you come in all that.
Ken Dychtwald: So a few years ago, we did a massive survey, asking pre retirees, what did they think they were getting is before COVID. What did they think they were gonna miss the most in retirement and they were clear as a bell, they said the paycheck, but then we asked a comparable 1000s of retirees. Okay, so you’re in it, what do you miss the most, and they were clear as a bell, they missed the action. They missed the people, they missed the reason to get up in the morning, they missed the stimulation. And what’s happening is that people are kind of thinking, is retirement a good thing? You know, how come our president is still working. And here’s, you know, Trump announced that he’s going back in the game in his late 70s. And, you know, we see Bill Gates, he retired from being a CEO and became a philanthropist. And so we see that the success model today are not people who stopped working and go off to the sidelines. But rather people who either reinvent themselves do something different, or scale back their work. Or, for example, what I’m doing is that I’m kind of reshuffling my portfolio, so that I’m working a little bit less, but I’m doing about half of my work pro bono, we used to call it volunteering. And I don’t really feel drawn to kind of do menial work, when I volunteer, I help companies and not for profits out that I think can be a contribution I might make. Now to your question about how COVID cause people to kind of get a little screwy, at first people thought, you know, there’s a kind of a virus going on, and we’re having to work from home. And so some of the stimulation and action about work has gone away. So maybe it’s just time to wind it up. You know, frankly, in my own life, I saw that all of my health professionals retired at the beginning of COVID. I think they all said, it’s a good time to check out because it was hard work for health professionals. But at the same time, especially when the inflation numbers started to hit, people started to say, whoa, whoa, whoa, wait a minute. Number one, I’m a little tired of sitting home my kitchen behind my Zoom screen all the time, I’d kind of like to have some more engagement stimulation. Isolation is not good for anyone. And a lot of people kind of had a wake-up call, I may not have enough money to go the distance. And I don’t want to wind up in the poorhouse when I’m older. But I’ll give you an example. My dad passed away in 2013. And he was a good man, hard worker, he had diabetes he figured he’d lived to about 65. So he made sure that he had the financial resources so that he could go the distance. And our My dear mom would be supported the remainder of her life and she was such a fit, healthy gal, we just assumed she’d stay fit and healthy. Well, before my dad passed away at 93. He and my mom had their 71st anniversary. She had had Alzheimer’s for 12 years, and did not want to be in an institution. So the $120,000 a year for the three shifts of home care had to come from somewhere they came from me. And my dad ran out of money, he outlived his money. And he was a proud guy. And you can imagine how hard it was for him to realize that he did not expect that he would live this long. And his money was not sufficient to go the distance and have to receive a check for me each month. There’s a whole lot of people during COVID began to kind of add up the numbers. And you know, 13 million people sought out a financial advisor for the first time and began to realize it, a little bit of extra work will put them in a better situation for their longer life. By the way, there’s one other valuable eight or nine years ago, if a 67-year old were to say I think I’d like to go back and work. And by the way elders have told us that be willing to work and an easier job and maybe earn less money. Don’t carry your ego in with you if you need to work and make some money you’ll have there are other benefits that come along. But during eight or nine years ago when the employment level was getting close to 10% It would have been harder for an older person due to ageism. And you know we want the young When people we don’t want their parents, but now that unemployment is so low, it’s an easy time, easier time for older people to find their way back into work situations. So one of the advantages of having lived now over 70 years is I can remember how things were different in so many ways. And often people say, oh, there didn’t used to be cell phones or computers, and that’s true. But when I was a kid, doctors wrote prescriptions in Latin. And the idea was that the field of medicine was too far beyond the average person to understand. You should just do what you’re told to the doctor. My doctor Victor Tepper wrote prescriptions in Latin, the pharmacist interpreted and you just are supposed to take your pills, and you’d get better. And there was a breakthrough in the late 60s and early 70s, where people start saying, I want to understand what’s going on here. I want to have some self-care involved. I want to take care of my own body too. You know, I got this crazy situation where I’m a keynote speaker. So I’ve keynoted you know everything from securities industry, Sif, now SIFMA IRI, all the insurance Limra million dollar Roundtable, I’m an I’ve just keynoted multiple times almost every major financial convention. So I sit in the back of the room and listen to the other sessions when I’m not speaking. And I don’t know what they’re talking about. I really don’t. And maybe they do, but I don’t. But it could be Latin to me, that the language that’s used to describe investments 529 Like who, who dreamed up the idea that 529 makes any sense to anybody 403 B, you know, target date funds, it’s like, I think that field is gotta cut the crap. And be able to explain things in a way that people can understand so that they don’t feel foolish or stupid. And they don’t hold you in some exalted position, because they don’t want to do that anymore. That’s another error.
Jack Sharry: Couldn’t agree with you more. Help us on the way. I think I think the holy, I’ll give you my take on where I see this industry going. It’s underway. Lots more to go for sure. But there’s two parts that where we fallen short with consumers, I won’t call them investors, they’re consumers. They consume financial services. And what is the user experience? We make it too hard. It’s to your point about language and terms and names and all that decumulation and all the rest of it. So there’s the user experience, how do we make how do we speak English? How do we make it intuitive, understandable, like going online, like buying on Amazon, it’s just simple, you just follow the bouncing ball easy button. And the other is that and this part is a lot harder. It’s what Edward Jones is doing. It’s what’s frankly, most all the major firms are doing right now. And that is connecting all the dots that need to be connected, so that algorithms can deliver recommendations that make sense that are highly customized and personal, individual. And there’s a lot more to go there. It’s underway. As a company, we’re actively involved in that sort of stuff. So we see it and you got all sorts of legacy systems, you got regulations, you got all sorts of stuff that’s makes it hard. The good news is and another reason I’m quite bullish and positive about our industry is it’s underway and billions of dollars, literally billions are being spent, in fact, Edward Jones, as we all know, has committed to spend a billion dollars this year on this effort. So in their public, they’re going to be spending billions more, as will many other firms.
Ken Dychtwald: Well, as humanity continues to evolve, the technology, you know, evolves with the benefit of Moore’s law, you know, doubling every 18 or so months and that half the price, there’s no question that AI is going to become increasingly formidable. And so having technology that can be put to use to better meet people’s needs, but also can be easily understood and explained and user friendly, is going to be the task of the next few years, for sure.
Jack Sharry: And the way I see it playing out is that the more money the more complexity, the more years where there’s an aging, the more you’re going to need an advisor to help because the algorithms can’t capture all that goes on there. In terms of where to live and what to do about health issues, or family issues, or all those sort of so called soft stuff that you got to consider. Yeah, how to manage the money and how to pay less in taxes and how to manage risk and all that stuff. Right the algorithms can do now is all doable, but then given my personal situation, who can help me navigate through that, because that’s the tough stuff. And frankly, another thing to your earlier point, is that we’re gonna then be able to make it more available to anyone have any means because it’s really not going to be so much of it be fabulous, because right now, there’s too much of our population that nobody’s caring to help, but it’ll come that’s satisfying. That does not seem decent. Yeah, I’m with you. So the next thing I wanted to discuss with you again, is the four pillars of the new retirement. These include health and aging, family purpose finances, so we’re going to dig in a little bit deeper and I’d love to have you so to kind of pull each of those apart and how they all relate to one another because they do.
Ken Dychtwald: In my mind, it was sort of a breakthrough of the work age wave did with Edward Jones, which is that the financial community, which is, you know, so powerful, and so large, has almost exclusively focused on money wealth. And by the way, though, if you look up the Middle English word wealth, which is where the word comes from, it stands for overall well-being in life, somehow, we’ve changed it to mean just how much money you have. What we realized, in previous studies that age wave is done. For example, we did one in partnership with HSBC in 20 countries, where we asked older men and women what was the most valuable resource or tool to help you live well, in your later years, and it didn’t matter if it was Mexico, or Istanbul, people said the same thing. They said, it’s the people you love. And it’s the quality of your relationships that make your life good in your later years. So when we first met the folks at Edward Jones, and they’re such a fine, firm, and with their presence in 68%, of all American communities, they’re kind of less about Wall Street, more about Main Street, they’re on the city boards, they’re coaching the softball teams. And they began to realize that, as we talked to them, that focusing just on money was missing the point, that if you talk to people, they tell you what matters to me, and we put it into four silos was, first of all, my health, we heard this over and over again, and focus groups, you can have all the money in the world. But if you’re got dementia, or if you’re suffering with cancer, or terrible pain, that money doesn’t make you feel so good. You need your health too. And by the way, there’s a health wealth convergence, that the healthier you stay, the less out of pocket money you’re gonna have to expend. And therefore you’ll wind up with greater wealth at the end your life. I know, that sounds like a head trip, but it’s true. The other thing is that people said that what they enjoy most in their later years, once they’ve kind of evolved through the child rearing, parental stage, and having to work full time stage, friends and family really matter. But we noticed that there were some twists and turns in there, that a lot of older people were serving as the family bank. So then not only did they care about their kids and grandkids, but they’re writing of checks. And so one of the issues there was, how do you enjoy the connection with your family, without finding yourself giving away too much of your generosity, and winding up having to be a burden on them later on? A major breakthrough with the Edward Jones age wave work these last several years. And by the way, I want to tell you normally when we release studies, major metric is if you got 100 million media impressions, you’re considered sort of a big-time player. We did these two major studies and a couple of tracking studies during COVID. And we’ve just passed 6 billion media impressions. So we really hit nerves. But this third area was purpose. And nobody had ever asked questions about purpose, and money, and family and health. And what we found was is that maybe yesterday’s view was that you have purpose when you’re in your 20s and 30s, and 50s. And then, you know, you should be happy just watching TV and reminiscing. No more people want a new purpose. They want something to do they want to be somebody, they want to maybe even be a better version of themselves. You know, I’ll quote David Brooks, the conservative writer for the New York Times and, and other sources. And David has said that at the end of your life, you’ll have two resumes, your career resume, you know, what did I do? How much money did I make? How big was my car, nobody’s gonna care. But Danny said, You’re gonna have your eulogy resume, who were you as a person. And that’s the one that people are going to think about. And that’s, in a way your legacy. And so with this, Edward Jones research, we decided to go after all four pillars of this new retirement, finances, which kind of makes it all work, health, family, and purpose. And by the way, we probed hard with our 10,000 respondents per study. So we had about almost 30,000 respondents in all, which one is the important one. And what came back continually was that they’re all important, and they’re all interconnected. And guess what the retiree said, I wish that I would have had a financial advisor that I could have talked to about my purpose and where I might live, and what the boundaries ought to be between my gifting to my family, and what out to know about the cost of health care. And so it began to cause the Edward Jones folks to become far more serious about the idea that this is a path paradigm shift. This isn’t just being a better stock picker, or a kinder financial advisor. It means widening your lens and broadening your toolbox a bit to be able to talk to people about what matters to them in their life now, and in the decades in front of them.
Jack Sharry: That’s great. That’s wonderful. So Ken, this has really been fascinating. So I want to dig in here a little bit, because we’re in the financial services business. And I’ve been observing that there’s a shift in the way advisors pregnant what clients want. So I’d like to, and frankly, how advisors service them. So I’d like to get your take. We’ve talked a little bit about this when we spoke with Ken on our last podcast, but I’d like to hear from researchers standpoint, what is it that investors aren’t getting? What do they want? What do they need? I know it’s all the above, let’s dig in here a little bit deeper, if we can, what are they not getting? And frankly, not that you would provide the consulting services that you’ve made available to ever John’s? But what’s the sort of counsel you would give to our industry? Let’s put it that way. What do we need to do to do a better job at servicing our clients? And what is it that they want? And neither are not getting?
Ken Dychtwald: Yeah, I think there’s three big pressures that are weighing in on the industry that are probably different than what the average economist or financial advisor would focus most on. One of them is, people really want you to know who they are, if you don’t understand that I someone might have a special needs child or that they’re supporting their brother, for example, as I am, to some extent, or that they’re caregiving a parent, and you just think that all that matters is my interest in what’s my risk tolerance? And, and what age Am I gonna stop working, and you don’t know who I am, I don’t need for you to be a life coach, they’re saying, but for you to be oblivious to my life, not acceptable anymore. Second, the financial industry is competing with the technological field, which is getting juiced up by AI. And so we used to talk about robo-advisors. But a lot of what financial advisors have done, can be handled right now through technology. So why are you even need it? Well, you’re needed because you can have some humanity, because you can check in with people, because you can explain things because you can know that husband might be not the wage earner, it might be the wife. And so you can talk to them about the fact that the woman might live five to seven years longer than the men, you can bring humanity and knowledge and perspective to those discussions that technology cannot. And people really want that, especially people over the age of 50, who don’t really have anyone to turn to about the next chapters in their life. When you think about it. My kids are now in their 30s. When they were in high school, there was all these career counselors and college counselors and military bases, they could have discussions where they could figure out what they wanted to do next. But when it comes time to consider retirement, there’s no one people have to talk to you. There’s no bootcamp, there’s no training course at the local community college. And so people want that financial advisor to be a resource to be a guide. In fact, we asked them one of the Edward Jones study, do you want your financial advisor to be a stock picker? Do you want them to be a partner, you want them to be your best friend. And what they said overwhelmingly was, I want you to be a guide. You’ve been up ahead, you know what’s coming in my life, because you’re an expert, and not only money, but people’s lives. So I want you to give me some forewarning as to what I ought to be doing differently, and what I ought to navigate around, and what I ought to double down on in order that years from now we can look each other in the eye, and I can say thank you. The third thing I want to emphasize is that the industry is almost entirely been focused on saving for retirement. It’s been an accumulation game. Great. We’ve now got 70 million retirees, and there’s 100 million more in line. They want to know how do I manage my resources in retirement. By the way 81% of the American public said they have never tried to figure out how much money they’re going to need or even how to manage resources on a monthly basis. And so that’s going to mix things up in some interesting ways. One of them is we need some new language. I sit in on financial meetings, and they use the word decumulation. I gotta tell you, I’ve never once heard an actual person use that word who’s not in a financial business. People talk about distribution or spending their life savings or making sure they have a paycheck for life or making sure their money will go the distance. We need to read language it. Second, we need to re motivate people, because a lot of financial advisors just don’t know how to talk to a 72 year old who is neck deep and trying to figure out how inflation is going to affect their savings right And the industry has largely been organized around investments, stocks, bonds, and such coming in from the side, or the insurance companies, the annuity companies who haven’t quite figured out the perfect model yet, and the annuitized paychecks for life, which I’ve been watching carefully, are valuable, and can probably save lives. But they’re still a little bit too confusing. There’s too many choices. And then financial media is not fun of annuities. And so they haven’t really rose up to the place where I think they’re going to be within a couple of years. So the big changes are, people want you to know who they are as human beings, and how their family and their life has got a different arc to it than maybe the next door neighbor. Second, they want you to be there as a human being and help guide them. And third, they really want to help making sense of maximizing and optimizing their resources in retirement, not just leading up to it, I’ll give you one example, about three quarters of the over 65 and retired population in America own their homes, two thirds of which are paid off. So we’re used to thinking in a youthful world of people’s financial strength in terms of their income, or their investable assets, we don’t add in and your home equity. So somebody might be sitting on a home in New Jersey where I grew up, and if they were to sell it and move to South Carolina, it’d be near the grandkids, they might gain a couple of $100,000, which they could then invest, they’d have a lower cost of living, there’s no state tax, they could go the distance better. So the financial advisor may need to widen that toolbox to include not just investments, but also annuities, and also home equity. And last, it might become the job of the financial advisor to suggest some course corrections. You know, back in the 1980s, there was a futuristic TV show about all of this and no, it was not the Flintstones, it was Golden Girls. Here you have four women who came together and shared a house. And by the way over the age of 75 42% of all women in America live alone, that is not cost effective, and it’s lonely. So a financial advisor might say, Have you thought of having a housemate maybe one of your good friends, or your sister or your brother could move in and you can share the expenses, which by the way, would allow your money to go a lot further. So widening the discussion is something that the advisor community, I think is going to be doing in the years to come or they’re gonna find themselves like Blockbuster video out of business.
Jack Sharry: Again, Ken, thanks so much. This is so fascinating. And something I’ve heard you talk about is healthcare and some of the ramifications of not managing it well, but I’m gonna put it in the larger context. One of the things that we’ve seen as markets, especially of late have been more challenging will be generous. And inflation is taken off that a lot of people just got shock. So inflation comment on that in a moment, if you would, because I know that that is a huge concern for most particularly people in or near retirement, everyone, but certainly paid people in or near retirement. So they’re concerned about costs and inflation is sometimes referred to as the cruelest tax. And there’s taxes, they’re concerned that they’re going to go up, and they just would like to find any which way they can to reduce taxes. And they are looking at health care costs, which they’re not getting help from our industry, frankly, on that that’s another huge concern. You’ve talked with people living longer that that becomes just a huge problem over time. So comment about that combination that for those that are in or near retirement, which is really that baby boomer generation. These are some of the real the realities that they’re trying to contend with and shared some statistics that are kind of eye popping in terms of how we need to think differently. And frankly, advisors need to advise differently.
Ken Dychtwald: Well, you’ve just Jack landed on, I think you got your finger on the pulse. One of the advantages of doing these surveys every few months over those COVID years, was that we were tracking what people were frightened about and what they were feeling good about and what their hopes were and how they were going to be more responsible financially. But then, when we did a few months ago, came soaring off the charts was inflation. And I had been doing surveys now as a social scientists for 25 years. I have never and I we didn’t when 911 happened we’ve done them when the when the markets crashed. I’ve never seen something changed more dramatically than this. And it wasn’t just what’s the price of gas? It was people at 55 saying, Whoa, I thought I had enough money. The last meeting I was at and now I don’t think I do and what’s my house worth and then what’s money worth and I don’t even understand inflation and what if it keeps multiplying and then to make things worse, they turn on the news and if they flick channels between this one and that one, they’re being explained things by people who don’t understand fine ants is their economics that are scaring the wits out of them about finances and geopolitics, and so on. So I think people need a steadying hand, if there was ever a time when the American public needed to have someone they can talk to who knew their name and knew their family who could calm them down, but also talk to them firmly about what they needed to do in order to go the distance, that time is now also COVID Put people more in touch with their own nervousness about illness, we have lived kind of in denial of growing old in this society, you know, I’ve been working in gerontology for 48 years. So I have been swimming in this in this pond for some time. People don’t want to think about getting all they don’t want to talk about it, you turn on your TV, all the old people are falling down and can’t get up, you know, they’re seven times more likely to be portrayed as negatively as to actually how they’re doing, we don’t really get a chance to see a lot of 70 and 80, healthy and fit and vital and productive and purposeful, older people, and there’s 10s of millions of them. That’s because the pharmaceutical industry has gone after the older population for good reason they people over 50 consumes 77% of all prescription drugs in this country. But unfortunately, it also gives us an unending stream of ads, where we hear about all the maladies that can happen when you’re aging. And the way a lot of people deal with it as they just turn it off. People do need to think about what does Medicare cover? What does it not cover? By the way, I want to say this and I apologize if I come off stupid when I say it. You know, I’ve written 19 books, I’ve won lots of awards, you know, I’ve got a PhD, I’m Mr. Age Wave. But if you were to say to me, Ken, I’ll give you a million dollars in cash right now, if you can explain Medicare to me, part A Part B, C, D doughnut holes, traditional, I couldn’t do it. It’s absolutely not user friendly. And to make things worse, Medicare is different state by state. So if you work for a financial firm, you work in Tennessee, there’s gonna be a different set of dynamics than if you work in Oregon. So the financial industry has largely just said, we’re not even going to pay any attention to the health care cost side of things. That’s somebody else’s problem. But people don’t know who to turn to. So that’s a big deal. And I would also add to the point that you made that people during COVID became a little more frightened about who to trust. Now, I’ve mentioned the word Trust in the last few minutes, but they’re not sure if they can trust their politician. They’re not sure if the people they’re watching on the news really know what they’re talking about, are they just entertainers, they need someone who’s going to be there for them, they need someone who can tell them the truth. By the way, people have said and studies that we have done and we’ve seen that they’re more likely to trust their employer than anyone else. But for the approximately 30% or so goes up and down a little bit, who have financial advisors, we saw that during COVID 94% of the population with financial advisors said that their financial advisor gave them some peace of mind, and some comfort and some much appreciated direction during tough times. So I’d even like to see the financial industry widen out so that it’s not just focused on people have high net worth, but in some ways plays a role in the inner cities, teaching young kids about money helping families that are struggling to make sense of wealth, and longevity, to understand that the factors better maybe some lectures at the local PTA meeting at the rotary clubs. I think the financial industry has been a little too, you know, playing in its own playground, and needs to do a little bit better job of helping everyone go the distance.
Jack Sharry: That’s great. So Ken, this is wonderful information, great insight, love every bit of it. Again, a little concerned because I hear all this and there’s seems like there’s a lot of negative forces here a lot of things to be concerned and scared about yet. I heard you when you and I were together in New York. At a meeting, you were quite optimistic. So tell us I’d love to hear about why you’re so optimistic.
Ken Dychtwald: Well, first of all, we’re living the dream of history. You know, for 100,000 years, people dreamed of the idea of living 5060 7080 90 years of life, the chance to get to know your children and grandchildren the chance to witness new breakthroughs to see the world. It’s kind of amazing. I mean, I view this age wave in this longevity revolution as history’s greatest triumph. So let’s be clear, there are some problems. But the phenomenon itself is an extraordinary triumph. I also feel that every single one of the problems that we’re confronting, whether it be not saving enough, or absence of purpose, or the fact that older people aren’t sure what to do with their lives. They’re all solvable. Unfortunately, you know, I’ve watched every single presidential debate over the last one In two years, both sides of the aisle, I don’t see anybody running for office in this country or asking the questions in the media who are going after these issues. And they’re not trivial anymore. We have such a large percentage of our population now over 50. It’s over a third, that to not focus on what are the possibilities? How do we make things better? How do we bring older people more involved into volunteering in the communities? How do we help people be more financially secure? These are solvable issues, we’re not confronting, you know, an asteroid running towards Earth, we’re confronting some new world challenges, and there are solutions for all of them. And last, I want to say that it’s a side of the equation on this point, Jack that people often don’t talk about. But during COVID, we did studies about the mental health of five generations. And who is doing the worst young people who is doing the best, older people? People said, How’s that possible? We hear that older people are having so many struggles. Yeah, they are. But they’ve also got a lot of emotional intelligence, they’ve got a lot of resilience, you know, they’ve been through hard times, you know, I was there for the death of my dad and the death of my mom, I’ve seen the birth of my kids, you know, I’m 72. Now, I’m a lot stronger human being than I was when I was 32. And so the world is being increasingly populated by longer lived, they’ve got some wisdom, they’ve got a lot of perspective. And by the way, people over 50 have 76% of all the financial resources in the entire country. So they become the most powerful, the wisest, and the wealthiest segment of our population, and they’re expecting some respect, and some help where they need it. And they deserve it.
Jack Sharry: Yep. Well, this is probably a bit dangerous. And one observation of the recent election that just occurred, in my estimation is that pragmatism, one that be what people were looking for is a more pragmatic approach to what how we live our lives. And I join you in your optimism, and looking ahead, because I see firms coming together around the issues like Edward Jones, and many others, that are coming together around these issues, to help solve them. So it’s not only in terms of their finances, but also getting us those so called software issues of how to help people sort their lives through so they can make better financial decisions and better life decisions.
Ken Dychtwald: So I join you in your optimism, if I could add, you know, and this is not that I’m a Republican, or that I’m a Democrat, this is my own just kind of values, I think we become a little bit too carried away with a WrestleMania style of behavior, you know, I’m gonna poke at you, and you’re gonna poke at me, and I’m gonna call you a name, you’re gonna call me a name. And I think that contributes to our kind of our craziness and our anxiety. I think it’s time that we do a better job of finding common ground and cut out a lot of the name calling and WrestleMania behavior, I think we need to be better people. And I think it would be a good role modeling for our children and grandchildren. And they’re also think we’d get some more solutions in flow.
Jack Sharry: And whether that’s part of what I mean by pragmatism. Let’s, let’s go figure it out and get it done. So Ken, great conversation, loved every bit of it. We have our last are actually two more questions to go each week around. Now we’re going a little longer. And I’m so glad we are doing that because you’ve had to shared such wonderful information. What are your three key takeaways from what you’ve shared with us today?
Ken Dychtwald: It’s hard to tie it down to three. But here’s the three that I think are probably the most valuable for your folks and your listeners and viewers to think about. Number one, what we’re trying for is a future in which there’s healthy longevity for everyone. We got jiggy with income inequality that didn’t seem right that some people are very rich, and other people are very poor. I don’t think people feel very good about longevity inequality. I know personally, groups of billionaires that are injecting with all sorts of hormones that are going off shore to buy themselves stem cell treatments, because they want to be able to live forever. And then I see lots of average folks struggling and hurting. So I’d like to see a world where we have healthy longevity for everyone. Second, we need a holistic approach to financial planning to and through retirement, not just stock picking to retirement day, we need a holistic approach. And I personally like the four pillars focusing in on finances, family, health and purpose to and through retirement. And third, and I’m gonna probably trouble some of your audience here. But I have been an advisor to many firms in the financial industry for almost 40 years. And I feel that the financial industry has largely lost its heartbeat. It’s become very focused on numbers and success and wealth. And that’s good. That matters. But you’re also in the business of saving people’s lives, that if you can help a person plan properly for their later years, they’re going to have some dignity, they’re going to be able to have some fun playing with their kids and grandkids. If you help people make the right decisions, they’re not going to feel foolish or stupid or regretful when they’re older. So you’re in the business of saving people’s lives. And there may not be any more important work to be done than that. And so I would love to see the financial industry become more humane and human, and caring.
Jack Sharry: And with you all the way I’m seeing it, I’m seeing it across the industry. It’s slow, it’s emerging, much more to go. But I’d like that the direction I’m seeing and also, again, share your optimism that we’re going to get there. And it’s going to, in my estimation, it’s going to take our industry to help make that happen. So Ken, it’s been a real pleasure to hear your thoughts and perspective, share the research, really enjoyed your willingness to share what you’ve been doing with Edward Jones and many other firms. But Jones has been, I think, the most recent and probably one of the larger opportunities that you’ve been involved with in terms of research, and so on. So enjoy the conversation very much at this point in our conversation, one of the things I like to do on our podcast is ask people what they do outside of work that they are particularly excited or passionate about, that people might find interesting or surprising. So please tell us.
Ken Dychtwald: Well, I’ll say a couple of things. First of all, I’m about to re married my wife again next week for the 40th time, we get remarried every year, different location, different religion. A lot of people say why don’t you do that? And I say, Well, how come you don’t, my family matters to me a lot. And second, the craziest thing that’s happened for me during COVID is traveling less, you know, I traveled 150 days a year, for 40 years, giving speeches and consulting. I’ve been home most of these last three years, and I’m fitter and eating healthier and working out more than ever. So I feel like I have been able to devote more and more of my attention to kind of taking care of me, which has been a good thing. And third, I feel that outside of work, I’m trying to reach out and be helpful to more younger people, not just my family, I feel that whether I can mentor some young kids coming up or students, I become really troubled. Maybe it’s the psychotherapist and me. The fact that we spend so much time focusing on what matters to us. We’re not paying attention to the fact that a lot of teenage girls are feeling suicidal and a lot of people in their 20s feel that there is no life in front of them. And they’re frightened and they don’t know who to trust. And so I’ve been reaching out more than I used to to try to be to lend a little bit of a helping hand to younger people.
Jack Sharry: Great. Well, thank you so much. Again, this has been a terrific conversation. And on behalf of our audience, thank you so much for all you have shared and also all you’ve done for our industry. For our listeners. If you’ve enjoyed our podcasts, please rate review, subscribe, and share what we’re doing here at WealthTech on Deck. We’re available wherever you get your podcasts. Once again Ken, thanks so much really appreciate.
Ken Dychtwald: Thank you, I thoroughly enjoyed our discussion. Thank you, Jack.