As baby boomers ebb out of the workforce and into retirement, financial advisers are helping wind down their clients' careers by preparing them for soon-to-be-reduced incomes.
Meet Cyndi Hutchins, Bank of America Merrill Lynch's director of financial gerontology — one of the country's first such positions at a financial management firm.
Her recent appointment marks the company's first foray into the science of aging. Hutchins works with other Merrill Lynch financial advisers to manage their clients' transitions into retirement. She specializes in settling the fears many aging people have about life without a steady paycheck.
Hutchins recently went back to school to earn a master's degree in gerontology from the University of Southern California to better understand her clients.
Hutchins explained how her newfound knowledge of "what is driving generational challenges" has helped her see the financial concerns of older clients in a whole new light.
After almost 30 years in the field, what inspired you to go back to school to focus on gerontology?
The focus of my practice as a financial adviser was to help clients put their financial pieces in place and get themselves in a position where they can retire. When I became interested in all this, I started speaking to others — people and clients — and got to their thoughts and feelings about retirement. There are a lot of issues covering the baby boomers and their aging we really weren't covering. I wanted to really know what was driving their generational challenges — for instance, the disappearance of defined-benefit pension plans and how that changed the landscape as baby boomers are facing retirement.
What about retirement most concerns your clients?
I think that their No. 1 concern when they think about this idea of retirement and this idea that they could live 20, 30 or 40 years retired is how they're going to pay for health care and what those costs are going to be. They're looking at resources to get guaranteed income in place to cover the out-of-pocket cost of health care. As they're approaching this longevity, they must consider how they might deal with the cost of long-term care and how they might be having to provide for their families' health care, in terms of aging parents or an aging spouse. They're recognizing that the longer they live, the more health care costs are going to be a problem. We're really trying to talk to our clients in terms of the issues and what they might want to talk about in cycling through work and leisure and planning for it all.
What can millennials learn from baby boomers, and how will their retirement needs differ from those of their elders?
Both generations are looking over longer retirements, with the possibility of longer lives that could translate over to longer retirements. As benefits start to disappear, the millennial generation is thinking that they're 200 percent on their own. The baby boomers are looking at a three-legged stool: pensions, Social Security and their own savings. Baby boomers are looking at one leg of that stool being knocked out: pensions. The millennials are looking at those three-legged stools, and it's possible that two legs are being knocked out (pensions and Social Security).
Baby boomers are saying to millennials, "Save as much money as you can; participate in your 401(k) to the extent that you can." They recognize the power of tax-deferred savings over a long period of time.
You said your job allows you to be a pioneer in an emerging field. What's challenging about that, and what about your work do you most enjoy?
Had you asked me a few years ago, I would tell you that what I most enjoyed was the face-to-face contact with financial advisers and clients. What's exciting about this role now is I'm able to pioneer something, create something, build something that nobody else is doing. I'm able to learn so much about what really is motivating an entire generation and put that education into practice into really changing other people's lives.
I think the most challenging part of my job is dealing with their fears — their excitement and their fear at this idea about living a longer life in retirement. On the one hand, it's seen as an opportunity to really fulfill things on their bucket list or go down paths that they didn't have the time to go down when they were raising families and choosing careers. They're really fearful because of the rising cost of health care, because of all the costs of retirement.
Helping them keep a healthy outlook and keeping it real is probably the biggest challenge. You don't want to come out there sounding like a Debbie Downer, but you want your clients to understand the issues that they're facing and face those issues head on and feel like they have clarity. There's so many things to consider.
You said you have a bit of an "unusual" hobby for a financial gerontologist. What got you interested in motorcycling?
When I met my husband 30 years ago, he was racing motorcycles locally in the area-sanctioned races. Just to be a part of that, I got involved in doing the behind-the-scenes kind of stuff. He's had a motorcycle all of our life together. We've talked about having a Harley for years because I wanted the big, comfortable ride.
A couple of years ago, in 2011, we flew down to Nashville for my birthday and our idea was that we were going to rent a bike, and my husband didn't call ahead and they didn't have anything for us to rent. So we made the spur-of-the-moment decision to buy one and ride one 13 hours home in the very cold April weather. We never regretted it — 900 miles.