Wealth Institute

What’s your retirement game plan?

While many of us successfully navigate life transitions, sticking to a retirement game plan often poses the greatest challenge.
March 2016
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Life is all about transitions, like graduation, starting a family, changing jobs, moving to a new home, raising a family, and eventually, retirement. While many of us successfully negotiate these transitions, retirement often poses the greatest challenge.

When an elite athlete retires from competition, it’s often the result of a career-ending injury or being cut from the team.¹ Many have had long and distinguished careers. Hall-of-Fame baseball player Cal Ripken, Jr. played in a record 2,632 consecutive games and was a 19-time All-Star.² John Salley had a 15-year NBA career, winning four championships with three different teams.³ But the timing of Salley’s retirement from basketball was not his decision.⁴

Ripken, Jr. and Salley enjoyed professional sports careers that were longer than most. The average professional baseball career is only 6 years long⁵ and NBA careers average only 4.8 years.⁶ Few retire on their own terms while still able to compete at the highest levels. Citing future health concerns, 24-year-old San Francisco 49ers linebacker Chris Borland quit after just one very successful season of professional football.⁷

While Ripkin, Jr. and Salley went on to build very successful business careers after they stopped playing, many others, like Borland, are not prepared for life after retirement from the game.⁸ Most have limited experience outside of professional sport to build on for the next chapter in their lives.

During an athletic career, almost all attention is focused on physical activity and development, nutrition, and the mental aspects of their sport, leaving little time to develop the social skills, self-esteem, resiliency and coping strategies needed to adapt to future lifestyle changes. A lack of transition planning and support services have been identified as significant contributors to the difficulty that many athletes experience transitioning to their next career after retirement.⁹

The issues that many elite or professional athletes face at the end of their sporting careers are actually no different from those the rest of us experience at our retirement – they just face these challenges much earlier. They often feel an initial sense of loss, followed by a period of re-orientation, then growth, and later, adaptation to their changed situation . Kareem Abdul-Jabbar, the all-time record scorer¹⁰ in the National Basketball Association, summed it up best – when he missed the first training camp after his retirement he thought, “what am I going to do now?”¹¹

The fact is that most of us (who are not professional athletes) have longer working careers and therefore have the luxury of more time to prepare for retirement – assuming that we start early, give it some thought, and save for it.

Why do we retire?

Life is about transitions, and like professional athletes, we go through many life transitions. These may include graduation, starting a family, changing jobs, moving to a new home, raising a family, and eventually, retirement. Retirement is really just another chapter in the story of our lives. We have successfully dealt with many transitions already, and retirement can simply be viewed as the opening of the next chapter.

The BMO Wealth Institute commissioned a study to look at the concerns, opinions and attitudes that Americans have about retirement.¹² When asked how much thought they put into the non-financial aspects of their retirement, 62% said they gave it at least some thought. They also felt that having a positive attitude or mindset towards being busy, active and independent are some of the most important factors found in satisfied retirees.

Attitudes or mindsets most likely found in satisfied retirees

Attitudes or mindsets most likely found in satisfied retirees

Source: BMO Wealth Institute survey by ValidateIt Technologies Inc., January 2016.

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¹ A review on transitional implications for retiring elite athletes: What happens when the spotlight dims?, Smith, J.L. and McManus, A. The Open Sports Sciences Journal, 2008.
² Cal Ripken, Jr. National Baseball Hall of Fame, accessed January 27, 2016.
³ John Salley, accessed January 27, 2016.
How star athletes deal with retirement, Laura, R. Forbes, May 22, 2012.
Just how long does the average baseball career last?, Roberts, S. The New York Times, July 15, 2007.
CHART: The average NBA player will make a lot more in his career than the other major sports, Gaines, C. Business Insider, October 10, 2013.
NFL players giving up millions and retiring out of nowhere before age 30 is becoming a trend, Manfred, T. Business Insider, March 17, 2015.
Why former 49er Chris Borland is the most dangerous man in football, Fainaru, S. and Fainaru-Wad, M. ESPN, August 21, 2015.
A review on transitional implications for retiring elite athletes: What happens when the spotlight dims? Smith, J.L. and McManus, A. The Open Sports Sciences Journal, 2008.
¹⁰ NBA history – points leaders, ESPN, accessed January 26, 2016.
¹¹ The end game: How sports stars battle through retirement, Martin Wrenn, J. CNN, January 7, 2013.
¹² BMO Wealth Institute – survey conducted by ValidateIt Technologies Inc. for the BMO Wealth Institute between January 13–16, 2016, with an online sample size of 1030 Americans consisting of 561 respondents aged 55 and older planning to retire in the next 10 years, and 469 respondents aged 55 and older already retired. The overall probability results for a sample of this size would be accurate to within +/- 3.05% 19 times out of 20.

The foregoing summary is not based upon the factual situation of any specific taxpayer, is not intended to be tax advice to any taxpayer and is not intended to be relied upon.
BMO Global Asset Management does not offer tax advice. Contact your tax advisor.
This information cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This information is being used to support the promotion or marketing of the planning strategies discussed herein. BMO Financial Group and its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors.
Estate planning requires legal assistance which BMO Financial Group and its affiliates do not provide. You should discuss your particular estate-planning situation with a qualified attorney.
BMO Wealth Institute, a unit of BMO Financial Group, provides this commentary to clients for informational purposes only. The comments included in this document are general in nature and should not be construed as legal, tax or financial advice to any party. Particular investments or financial plans should be evaluated relative to each individual, and professional advice should be obtained with respect to any circumstance.
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