Ep15: MIT AgeLab – Inventing Tomorrow

Patti Brennan: Hi, folks. Welcome back to “the Patti Brennan Show.” Whether you have $20, or $20 million, this show is for those of you who want to protect, grow, and use your assets to live your very best lives.

Hey, for those of you who have tuned in that last podcast, the feedback we’ve gotten has been phenomenal. With me again is, John Diehl. He is senior vice president at Hartford. John works directly with the MIT AgeLab. I have to tell you that the last show was so fascinating. We are going to pick up where we left off, and talk about the different phases of a person’s life.

We talked about the concept of 8,000 days. So, John, can you re cap for us what we ended with on the last podcast? Tell us about the 8,000 Days.

John Diehl: Sure, Patti, and thanks for inviting me back. 8,000 days is, basically, the theory from Dr. Joe Coughlin, who heads the MIT AgeLab.

Joe puts it this way. He says, “In America today, your life can be divided into four 8,000 day segments. It’s approximately 8,000 days from birth to graduation from college or university. Another 8,000 days to your first midlife crisis,” because we may have multiples now.

“Another 8,000 days till the day we retire and, oftentimes, another 8,000 days, at least, until the day you expire.”

8,000 days, if you broke out your calculator, it’s just a little shy of 22 years, so you’re looking at, approximately, ages 22, 44, 66, and 88.

Patti, the challenge is…And you started off the last episode with a quote from Dr. Coughlin, who said, “We have a longevity paradox. We finally have achieved what mankind has been trying to achieve since we walked living longer.”

Now, the question is, what do we do with all that time? That’s exactly what 8,000 days is about. If you think about those segments, first of all, Patti, when people realize that they may be retired for as long as they were alive between birth and graduation from college, wow.

Patti: All of a sudden, it becomes very real. Wow, what am I going to do with all that time?

John: Not only…

Patti: I went through so much during that first 22 years.

John: Yeah, not only are we living longer, we’re living better, but here’s the challenge. That, in the first three segments, the script has already been written. By that I mean, we know in the first segment go to school, get good grades, get into the college, the career, the armed services of your fancy.

When the second segment starts, everything is growing. Hopefully, your income’s growing, responsibility’s growing, your family may be growing, all until we get to the point, usually in your mid 40s to early 50s, when we pause, we step back, and say, “Wait a minute. Is this what I want for the rest of my life?”

We’ll kick that around for another 22 years, but it’s that last segment, Patti, that we don’t know how to conceptualize it because people living retirement today often base their vision of retirement on what they observed in their parents and their grandparents’ generation. The problem is our retirement today looks an awful lot different from that.

Patti: It is a whole different ballgame. I think that that’s one of the biggest issues that we find in the financial services industry.

As you know, I used to be a nurse. I was an intensive care nurse and dealing with the aspects of losing the comfort of a regular income and the concept of perhaps a declining health or cognitive health. Those two things coming together, and then having the ambiguity of, “What am I going to do with my time every day?”

It does create some anxiety that people often don’t realize until they’re in it, and then it becomes a whole new ballgame for them. It’s so very different than what they saw with their parents.

John: That’s interesting, Patti, because Dr. Coughlin has a study that he refers to where it states what concerns people most about retirement as we age. I’ll tell you, through age 65, I think, traditionally, the financial services industry has done a pretty good job because as most people guess, money is the thing that concerns most about retirement.

How much is it going to cost? How much income am I going to have? How much do I need to make it last? How much can I take each year? It’s all about the quantitative, but we see from age 65 to 75, money begins to be replaced by health care as our number one concern, or our physical health, I should say.

Here it would be a good thing to point out. The researchers at MIT say that aging should not be defined by chronological age. It’s really a factor of three primary resources we have available to us. What is your physical resource? How’s your health? Do you have the health to be able to enjoy the things you wish to?

What are your finances? Do you have the money to enable you to do the things that you want to do? Thirdly, the one that’s neglected the most, your social resources. How engaged and connected are you? There’s three resources.

I can tell you, Patti, I’ve met some folks who were 85 years old who are still in the honeymoon phase. I’ve met other folks who were 64, and unfortunately, entering some of their managing longevity stages that we’ll talk about later on this podcast.

Patti: It is very true. It is unique for each individual. It’s not something that, “Oh gee, I’m 65 years old and this is where I am.” It’s a case by case situation. I think that that is so important and relevant.

John: Interestingly, too. I mentioned that study. At age 75, money actually shifts down to the third point. Health is number one, cognitive decline number two, money number three, because as we age, we start to set in with, “What good is the money if I can’t enjoy it the way I intended?”

Patti: What my experience has been is it becomes less relevant, and yet, they do worry about their own cognitive decline and their ability to manage it properly.

I find that a lot of times people will come in, couples will come in, and even if the couple, one person is relatively healthy, the other one is no…They want to make sure that if the not so healthy person has always been managing things, that they have a go to person to help them, and make sure that everything continues as seamlessly as possible.

Once they have that comfort and that peace of mind, then they can go on and live their life, and deal with some of the other challenges that they might have.

Let’s go back to the other 8,000 days. The MIT AgeLab, which by the way, again, if you listened to the first segment, or if you didn’t, go back and listen to it.

It’s amazing, some of the things that John has brought to our attention in terms of what the AgeLab has discovered as issues that you may not realize until you listen and understand, in terms of the decisions that people make, and how retailers, and how financial services and health care needs to change to accommodate the things that are happening as people age.

Let’s go back. The one study that the MIT AgeLab did is phenomenal. It’s the age you peak at everything. For example, brain processing power, I never would have thought that with four kids, that they peaked at age 18.

John: [laughs]

Patti: To me, they had no common sense.

John: I always joke with people remembering names. Sometimes we worry ourselves. We say, “Gosh, I can’t remember names anymore.” Guess what? If you’re over age 22, that’s perfectly normal, but you say, “I’m really concerned. I can’t even remember faces anymore.” That’s age 32. [laughs]

Patti: Wow. OK, I don’t feel so bad now, John. Thank you so much. That’s amazing. When salaries peak…Life satisfaction, let’s talk about that.

John: Yeah. The interesting thing about life satisfaction in this study is it’s the only data point that repeated twice during the lifespan. The first time life satisfaction peaks is age 23. Most of us are probably getting started on that exciting phase of our life.

The world’s our oyster, all the avenues are open, not a lot of obligations, just getting started. It’s exciting, but the interesting thing about that time is we seem to have a lot of time, but we don’t have the money to do anything with it. [laughs] We make the most out of it that we can.

Interesting, life satisfaction peaks again at age 69, so age 23 and age 69. If you ask, “Age 69? Why?” It’s when the researchers would say that you’re probably at your highest average of those three things that I talked about.

You probably still have a good amount of your physical health. You have built some financial assets, and now in addition to having some time, you have the money that you can put towards that time. Thirdly, you’re still pretty healthy in terms of your social engagement, your friendship circles. You may still be working, or volunteering, or whatever it may be.

When I say this, people think, “Wait a minute, I thought you said as we get older or we get these health issues that…” Yeah, you may, but what’s even more interesting…Two more data points for you, Patti. My favorite, happiness with your body peaks at age 74.

Patti: I love that one. I thought that was phenomenal.

John: I’ve told myself at that point, you got to play with the hand you’re dealt.

Patti: Absolutely.

John: It finally hits home. Lastly, psychological well being, “Tomorrow is going to be better than today,” peaks at age 82.

Patti: To me, that seems counter intuitive. Why is that, John?

John: It is because you recognize the things in life that are really important as you begin to take mortality into account. You allocate your time towards the things, hopefully, that mean more than some of the other stuff that we worried about at other points in our life. We have the time and the assets and the resources to devote ourselves to things that mean something.

Patti: You know what word comes to my mind, John?

John: What’s that?

Patti: Wisdom.

John: Absolutely.

Patti: That is, to me, everything. When you’ve lived your life and you’ve seen so much, you’ve probably gone through a lot of things, it could be with family, etc. You get to the point of time and you understand that, “You know what, at the end of the day, does it really matter? What really matters?” To me, that’s what wisdom’s all about.

John: For sure. It’s pattern recognition more than particulars, getting to recognize situations and understanding. What you’ll hear from people who are more seasoned, typically, is rather than running around with their hair on fire. They’ll say, “If it’s the worst thing I ever face, the head will be a blessing.” We’ll cross that bridge when we come to it.

Patti: What a wonderful thing to be able to say.

John: Absolutely.

Patti: Let’s talk about the four phases of retirement. Again, perfectly defined. I see it every day. I’ve never seen anybody define it as well as you have, as well as Dr. Coughlin at the AgeLab. Let’s talk about the four phases.

John: Sure. Let’s start with the first phase, which we call either managing ambiguity, or it’s also known as the honeymoon phase. The first phase of retirement is the thing where everybody usually thinks of. “I can’t wait. I’m gonna take more trips. I’m gonna go see the grand kids.” The key is flexibility. Thinking about how we’re going to spend our time.

Here’s the thing, Patti, is that one of the major issues that we’ve seen people wrestling with now, in that initial phase, is the role of work. I know what you’re saying. You’re thinking, “Retirement used to be defined by absence of work.” Not anymore.

What I’m going to tell you is what we see is that 34 percent of American state, they’re actually 65 percent say, “I’ll work past age 65.” 34 percent say, “It’s not about the money. It’s about the social engagement. It’s the identity. It’s the purpose. It’s the mission.”

Patti: I see it every single day and it is so important. We forget the importance of that interaction with people at work and how it helps to define our purpose. It gets us up in the day, etc.

John: A point here from a gender perspective, and this is generally speaking. This area of work and loneliness and isolation is hitting the male population more so than the female population.

Patti: I have had several clients who were high powered executives, Fortune 500, and we planned the retirement. We got them retired. They have all this extra time, and they went into a deep depression. I’ve had several people in my conference room and they burst into tears. They said, “I just don’t know what to do with myself.”

John: Because they’re supposed to like it but they don’t. In fact, for a gentleman, the second question he’s most likely to hear from someone he’s never met before after he’s asked his name is?

Patti: What do you do?

John: What do you do? Not just for 5 to 7 years anymore, 15, 20, 25 years. Patti, I’m not telling you, you’re going to work like you worked for the first 30 years of your career. You’re going to want more flexible work. You’re going to want more control over your schedule.

You may only want to work 15 hours a week not 60, or you may want to work for a cause that you believe in aka volunteering.

Somehow, in this ‘60s to ‘70s time frame, when I’ve got all those resources I’ve talked about, “I’ve got tremendous skills. I’ve got people skills. I’ve got institutional knowledge. I’ve got work ethic. I’m not ready just to retire to the rocking chair.”

Patti: I will tell you, to me, one of the biggest mistakes that large companies are making is forcing these people to retire. Think about the experience and the resources that they represent over their lifetime and you’re going to just push them out the door. I think it’s crazy.

John: Especially now when you look at US workforce demographics. We’re running up against the labor shortage especially in skilled marketplaces. You’re going to find companies wanting to retain their aging employees.

Also, let’s not forget those employees are usually the culture carriers of your company. They teach the younger folks who were coming on board the importance of why the company does what it does, not just how they do it.

Patti: Great, great point. The other part of it is the change in the family dynamics in that first phase.

John: Sure. In the honeymoon phase, when it starts, you’ll probably find yourself providing more financial support to your aging children than you will your aging parents, but at some point in this honeymoon phase, it will transition. You’ll turn around and notice that mom and dad need a little bit more help.

Remember that help may not just come in the form of making sure that they’re taking the proper med. It’s a tree falls in their yard who make sure that’s cleared out of there. Who’s checking in on them to make sure that they’re safe in the home? Oftentimes, this is a loss of productivity.

As we think about what our retirement plans are, I think Patti, I’m sure you do this with your clients, is thinking about the role they play in their own family. Will they be a primary caregiver, the spouse, another family member, mother, or father? It’s important to take in consideration.

Patti: Again, because people are living longer. We talk about the sandwich generation as it relates to people in their 50s. People who are retired are still in that sandwich generation where they’re taking care of, in some cases, their own parents, their children, and even grandchildren.

Think about the implications, both financial as well as personal, what that could mean for that retirement experience.

John: The last thing that happens during this phase, as I say, it’s where the rubber meets the road. For years, we’ve worked with you, Patti, that help us understand how much income will be coming in? What were our expenses look like? The truth is, it’s pretty hypothetical. It’s not hypothetical anymore.

Patti: It’s very real and that becomes real scary.

John: [laughs] It becomes real. We don’t have to guess at it anymore, but it may take us a few years to figure out what in reality it is. That all takes place during this first phase, if you will, the honeymoon phase.

Patti: The next phase is the big decision phase. Boy, we see it all the time. Again, it’s so important that we recognize that’s a phase. We need to make these decisions.

John: In the big decision phase, it’s usually when somebody says, “It is time to cut back in what I was doing for work or volunteering.” We have to make some decisions. On the first podcast, Patti, we’ve talked about the three questions, the ice cream cone and the light bulb, and who am I going to have lunch with?

In this phase, those are the three questions that could become really important. Where are we going to live? Are we going to move closer to family? Are we going to move to a place where we always wanted to live? Is there access to the things that we want to do?

Yes, medical care, but also entertainment and dining options. You name it, anything is physical activity. We have to remember that. I think this is partly where ageism has seeped into all of our lives.

People who are in their 70s, 80s, and 90s are still real people that have activities and ambitions, and things that they want to do. We can’t let our environments limit us.

Patti: It’s really important to ask the question because oftentimes people will come in and say, “We’re thinking about moving close to the kids.” They live in Virginia or they live in California.

I always reflect that back to them and say, “It really would be nice to be close to the kids. What’s it going to feel like when you move there and you’re not near your friends? How’s that going to feel? You’re going to have to have new doctors. How does that feel to you? Does it intimidate you? Is that going to be OK?”

Some people are very comfortable with that. They’re very gregarious. They make friends easily. There are others who, they’re home buddies. They watch television. They don’t necessarily have or need a big social network.

That’s a whole different ballgame, but people don’t often think about that. They’re going to move close to the kids, but what else does that mean in terms of their quality of life?

John: What happens when the kids get transferred, move out of town to the next location? Your point, it’s not easy to make new old friends. In fact, it’s virtually impossible.

I ask people to think about the communities within their community that they’re attached to, if it’s a faith community, if it’s a community organization, if it’s friends, well then maybe there’s a way they can try out that new area before they make the drop decision on, “Well, let’s move there.”

Maybe they can long term rent there for a season where they are near their family, but they can start to investigate. Where are the doctors? Where are the grocery stores? Where are the entertainment venues? Where can we start making some friends before we even move into that community?

Patti: John, I can’t even tell you how many times I have that conversation and encourage people not to go ahead and make a permanent decision on something that could turn out to be temporary. It is perfectly fine to rent.

In some cases, it’s much more cost effective because you also don’t have the things that come along with homeownership including the transaction costs and things of that nature. That’s really interesting. Anything else in the big decision phase?

John: No, I think again, revisiting that your first podcast episode where we talked about those three questions, housing, transportation, social connection, biggest things in that phase.

Patti: Now we’re in phase three, navigating longevity.

John: In navigating longevity, it’s usually signposted by the fact that someone needs a good amount of caregiving. Could be a spouse who’s providing that caregiving could be an adult child who’s providing that caregiving. Depending on where we are in that. Caregiving, as I mentioned earlier, is more than just making sure mom and dad are taking the right medications or eating right.

It’s everything associated with it. During this time, if you’re working and you’re providing caregiving, you’re going to find your productivity challenged because when mom or dad need help, it’s not always exactly scheduled.

Patti: I will tell you John my own personal experience. I remember when my mom moved close to my home because the home that we all grew up in was too big for her to handle. Dad had passed away, so she moved close to my home, and she was literally between my office and my home. It was really interesting. It’s really hard to take care of another human being.

There were a couple of instances where I was in the conference room, and we had this code, and I got the code, I got the alert, and my mom was stuck. I needed to leave that meeting right then in there, get in my car, blast over to get my mom to rescue her from whatever it was that she was going through.

That happened a fair amount of time, and it made me realize how hard it is to really do this on an ongoing basis. It was also a very difficult thing for me to admit that maybe I wasn’t the right person for her to be close to.

That my life had taken on. I have four kids. I have a business. We had to make a different housing decision for my mom. She moved down to Florida to be closer to my brother because he was able to be a little bit more flexible. I got to tell you, I felt terrible about that. I felt so guilty because I’m the girl. I’m the nurse of the family. I’m the financial person of the family. It’s an interesting thing to wear both of those hats. Yet I wasn’t able to do for my mom what she really needed.

John: Well, and even for the person that does, Patti, I’m sure that you’ve tried to help people through connecting them with resources that can help. In my own situation, my grandmother lived with my mom for years. It wasn’t just the physical aspect of caring for my grandmother. My grandmother aged and she started to lose it a little bit on the fringes of her mind and memory. She would accuse my mom, perhaps, of stealing things. There was the mental part of it.

At the same time, this is a parent child relationship. We always tend to look at our parents as though they were age 30 and we were age 15. We have that respect, that love for them. Yet it changes. It takes a certain mental toughness to be able to stick this out.

I will say, Patti, I think one of the most underappreciated aspects of working with competent financial advisers is getting to learn about the experiences of other people, like me.

Patti, I know you’ve helped a lot of people. I know you, yourself, have dealt with some of these issues. Being able to share those things. “Hey, if I could do it all over again, here’s something I wouldn’t change” or “Here’s a couple of things that I would change immediately, that I would do differently.” That kind of insight to someone that’s in that kind of position is worth more than gold. Again, that comes from either the person needing care or the person providing the care.

Patti: It’s interesting. I often tell people that when I take a look at over the 30 plus years that I’ve worked in this industry, we have literally helped thousands of people retire and stay retired with peace of mind and financial security.

You get to do it once. Don’t you want to work with somebody who has pretty much seen almost everything and not have to experiment and make the mistakes that so many other people have already made? That, to me, is the most important thing.

This is not about Patti Brennan. This is about the industry in general. Again, kudos to the MIT AgeLab that’s bringing in all these insights to make us better at doing what we do for our clients. Kudos to Hartford for partnering with them and bringing this to financial advisers throughout America. It’s important. It makes a huge difference in the quality of life for our clients.

To me, that’s what it’s all about. I tell people all the time, “This is not about your money, it’s about you.” That experience and making sure that they get to live life on their own terms is my purpose to why I do what I do.

John: Absolutely.

Patti: We’ve gone through the first three phases. Fourth phase which is…Boy, wow, what a phase this is.

John: The fourth phase is called the solo journey phase. Obviously, it’s nothing that any of us look forward to, but the researchers at the AgeLab do remind us. Aging is usually not a team sport.

It’s usually a high likelihood that one of the two in a committed relationship wind up aging by themselves, divorce, widowhood, never married in the first place. Now that we’re living into our 90s, it’s something that we need to think about and prepare for because we can stick our head in the sand.

Pretend it isn’t going to happen, but that only makes it more difficult to deal with that and when it does. In this stage, Patti, the survivors really called to reinvent themselves.

It’s interesting because depending on what stage of life it happens, what their physical, financial, and social resources are, they may be thrown into back and to one of the other phases. You may be asking questions, “Where do I want to live? Am I going to go back to work?” All those things, but social interaction is so important at that phase.

Patti: It is so very, very important. To me, the most important thing is to recognize that that’s a possibility and to really, really know the questions to ask. Nothing has to be decided upon right away. You’re dealing with the grief. You’re dealing with the loss. I have a wonderful, wonderful client.

She’s just the greatest and she was a sudden widow. I thought it was so interesting. I was checking in with her. I gave her call. Just wanted to see how she was doing, and she said, “You know Patti, the one thing that I never realized about John is how loud he was.” I’m like, “Really?”

She said, “Yeah, the house is just so quiet. When he was here, he’d be upstairs. I could hear him walking. I could hear him pulling the chair out in the office. He was clanking. The TV was on. He’s opening the refrigerator, and now it’s just so quiet.” I said to her, “What are you going to do to create sound in your life?”

She thought that was such an interesting question, and I said, “It’s not so much about the sound. It’s about the people that you’re surrounding yourself with. I just want to make sure that as difficult as it is, to make sure that you’re going out, that you’re not isolating. It’s hard to go through this grieving process. There’s no perfect way. It’s different for everybody.”

I said to her, “I just want you to know I’m available any time you come over the office. You need something to do. Believe me, I’m going to put you to work. I’m going to have you photocopy whatever it is, but just occupy yourself to get you through this difficult period of time.”

John: I think the number, Patti, is something like 40 percent of women over age 70 are currently aging by themselves. As we think about divorce, widowhood, never married in the first place. This is where it comes in to the study of longevity because we’re living into our 90s.

The average age of widowhood in the United States, I believe, is right around 59 years old. People hear that and say, “My god, it’s so low.” What happens is, men tend to marry younger, especially subsequent marriages. They tend to marry quite a bit younger, mixed mortality in there. You have this and it never fails, Patti.

I’ll be speaking at a public event. There will be two ladies sitting up front.

They’ll come up to me afterwards, and say, “John, I can’t believe you just said that. I’m 53, she’s 56. We were both widowed in the last year. Let me tell you what we’ve been going through.

“The reinvention of self, obviously, as you said, the grieving period has to happen, but realizing that there is still life out there for you, and realizing often that your spouse would want you to take advantage of that is sometimes the impetus that get back in the game because that game could last another 20, 30 years.”

Patti: John, I am all about the hope. I’m all about the perspective of, “This is a terrible time you feel awful and it’s the pits.” We’ve gone through this with so many people, and you’re probably not going to believe it when I say it, but it is going to get better.

Your life is not going to go back to ever what it used to be, but it’s going to go back into a new normal for you. What we’re going to do together is to figure out what that looks like for you.

John: Patti, I would come back to recap what we talked about at the beginning of this episode. Psychological well being, “Tomorrow will be better than today,” continues to improve, generally speaking, through your early 80s, which means that this improvement may actually encompass things like widow or widower hood. It may encompass your own physical issues.

Again, being able to recognize patterns and being able to look for the hope, as you mentioned, in the life that lays ahead and the opportunity, is a reason for optimism.

Patti: John, thank you so much. This is fascinating. We’re going to stop here because I want our listeners to know that in the next podcast we are going to be really digging into the practical things that people can do because you know me. I’m very action oriented.

We’re all about helping our listeners, helping our clients, helping other financial advisers provide a client experience that makes a difference in the quality of their lives.

In the next episode, we’re going to be talking about the practical things that we can do, thanks to the MIT AgeLab, Hartford, and John Diehl, that we can learn and apply on a day to day basis to really make a difference for our listeners and the people that they love the most. That wraps it up for today. Thank you so much for spending your time with us.

If you want to learn more about the insights that we’ve gained from the MIT AgeLab, just head over to our website at keyfinancialinc.com. You can schedule a call with me. By the way, be sure you hit the subscribe button if you liked today’s episode. Turn on your notifications. Share it with as many people as you want. This information is really, really important. That’s why we do it.

Let us know if there’s anything else that you want to learn about. Until next time, I am Patti Brennan, and we will see you in the next episode. Thank you so much.