Solving retirement issues often starts with listening

One of our daughters called recently to catch up on what was happening in her life. As she described her situation, I brilliantly solved her issue.

Except I didn't. I offered advice and solutions before I heard her out. She didn't need my suggestions, she needed my ear so that she could discover the answers inside her. I didn't want her to hurt, so by coming up with answers, I imagined I was preventing her pain. But that may have been more for me, not her.

What I notice in client meetings, is that as clients interact with each other, they often have trouble listening. Even if they wait for the other person to talk, they may be attempting to reload rather than hear.

Brenda Ueland wrote in her essay, "Tell Me More: On the Fine Art of Listening," "I want to write about the great and powerful thing that listening is. And how we forget it. And how we don't listen to our children, or those we love. And least of all — which is so important too — to those we do not love. But we should. Because listening is a magnetic and strange thing, a creative force. Think how friends that really listen to us are the ones we move toward, and we want to sit in their radius as though it did us good."

Financial planning is about listening even more than solving. Money is the wrapper around people's lives. A store of value should not become a measure of one's value, but we often form opinions about what we and others have. If we are really listening, what are we hearing is our own thoughts. Let me share what I have heard over the years.

"Successful people must not be ethical to get ahead." This is the opposite belief of, "If people worked harder they could get what they want." Neither of these statements can possibly be true. Sure you can find cases for each, but those are anecdotal. If you are espousing those beliefs, you can't be hearing your inner voice.

When I see these feelings expressed, it seems to come from people who are either justifying their own financial success or lack thereof. When the Star Tribune writes about the teacher of the year, he or she is less financially successful than the CEO of the year. They may work equally hard, but have chosen different careers and are rewarded differently.

Financial planning tip No. 1: Comparisons are always incomplete and therefore generally not useful. If you hear yourself making them, stop and explore where those feelings come from.

Another thing I often hear are statements without context. Listening draws out the context. When someone says they need a certain amount of money to retire, they are making a statement about security.

A nice retirement is based on what you need to spend to feel comfortable and the flexibility you have to adjust it. A lump sum of money is going to produce an income stream, just like social security or a pension would. It's not the lump sum that matters, it's the income that it can generate based on how it is invested and your risk tolerance. Focusing on the pile of money is like ignoring the garden and staring at the mountains of dirt.

Financial planning tip No. 2: If you hear yourself constantly talking about your retirement nest egg, explore what you want to be able to spend instead. When people are living off their portfolios, a $5,000 spending reduction is equivalent to having an extra $125,000 invested (if you are spending 4 percent of your portfolio).

I often hear couples talking over each other around money. They create caricatures of each other as a way to either justify their own money feelings or minimize their partner's. But when couples listen to each other, things radically change. Couples often point to behavior, but don't investigate what that behavior may be saying.

When the stay-at-home spouse in a couple is viewed as overspending, it can stir up unresolved relationship issues. The issue is generally not the spending, it is about what that means. The "provider" may be feeling like they are not able to fulfill their role. They may feel as though they are never going to be able to adjust their work style. They may not value what it takes to run the home. The other spouse may feel that their skills are underutilized. They may want more of their spouse than they are getting. They may feel like they are being controlled. Without hearing each other, these issues remain triggers.

Financial planning tip No. 3: When your partner's behavior is creating problems, first listen to what your own feelings may be about your role and then explore with them what they are experiencing. To really listen to someone is to remove yourself from the equation and focus your attention completely on them. To listen to yourself is to sit quietly exploring your reactions. Neither is easy but both are transformative.

Ross Levin is the chief executive and founder of Accredited Investors Wealth Management in Edina.