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I hope you had a great holiday, a unique day on the calendar, celebrating both Thanksgiving and Chanukah for those so inclined. We had a happy bird on Wednesday evening; it was a treat to be with our kids and grandchildren in Los Angeles. Our Eastern family checked in as well.
The balance of the year will go by quickly. Travel safely during this time period. Think of your clients and their needs. Reach out when you can.
lawbiz.com
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Entitlement and Retirement
As I noted in a recent blog post, the Wall Street Journal recently provided survey statistics that show a notable disconnect between what people expect to have for retirement and what they will actually face. To recap a few key examples:
Only 46% of retirees will be able to afford their essential needs in retirement; yet 78% of those surveyed expect to be happy in retirement. Of workers 55-plus years of age, 54% said they thought they'd need $250,000, exclusive of house and pension, for retirement. Only 24%, however, said they had that. Only 38% believe they will be able to afford "extras" (like travel) in retirement; yet 72% believe their dream retirement includes taking really nice vacations.
A big reason for this disconnect is the entitlement mentality that too many individuals apply to retirement, a phenomenon I often see in my coaching of lawyers. There is perhaps no profession where a sense entitlement is less justified than in the law. The commitment to the success of the firm that successful owners/partners have is the opposite of entitlement, though it is the breeding ground for such feelings.
But the recent financial crises seem to have changed this commitment, at least for older lawyers. They have seen their financial assets decline and now face hard questions: "How much of today's earnings can I spend on gratification for today?" "How much do I need to put aside for safety? Do I have heirs I need to provide for and how much do I need to put aside for them?" These questions define an internal conversation that older lawyers are increasingly having with themselves. These and similar questions focus more on reality, not on entitlement to a previously earned standard of living.
The income stream for most lawyers comes from their law practice. Lawyers unwilling to adjust their lifestyles due to a sense of entitlement likely must remain in practice to have the money for funding retirement, likely by eventually selling their practices. Every lawyer will have different income needs in retirement, and valuation of a practice to support retirement can vary widely.
In too many cases, lawyers have not adequately thought this calculation through. Their first thought often is to sell their practices, but with unrealistic expectations: "I'm earning a million dollars a year and I don't want to sell for less than that." That kind of entitlement mentality is insupportable when lawyers have lived beyond their means and need money now. If you have not defined what you need in retirement, do so and begin planning to set aside that amount now. Granted, that is a tough discipline; but the alternatives for failing to accept the discipline of ownership are far tougher.
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Holiday Special
$275
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For the lawyer in your life, start the year right.
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1-800-837-5880
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Special one-time coaching session with Ed (normally available only as part of the full six-month package) and a copy of Life After Law.
Note: This is a one-time offer with limited availability. First come, first serve.
About Ed:
- Lifetime Achievement Award, State Bar of California (LPMT)
- Fellow, College of Law Practice Management
- Board Certified Coach to the Legal Profession, SAC
- Member of the Million Dollar Consulting® Hall of Fame
- Learn more About Ed, his Coaching Program and his Books & CDs
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