Money and decisions about work+life “fit” are deeply intertwined. Two transitions that often prompt a reevaluation of the role work and money play in life were in the news this week: retirement and having a baby.
The old model of retirement continues to fade as more companies announce reductions of corporate supported pension benefits. (NYTimes 2/9/06) And, the ongoing work and motherhood debate reignited when the death of Betty Freidan last week prompted reflections on the state women’s lives in 2006, both at home and in the workplace. (Knight Ridder 2/7/06, NYTimes 2/8/06)
Common to these articles was a new answer for both retirees and parents that lay beyond the traditional, knee-jerk all or nothing, “work or no work” response. It involves understanding how to creatively adjust your work+life “fit” in response to these transitions, and, even more importantly, feel good about it. What does that mean? For many, their adjustment will involve working less, and in turn, making less money. But it doesn’t end there.
Most people don’t realize that there is a critical second step: redefining success related to money so that you feel good about making less of it, at least for a period of time. Because if you don’t, your arrangement will feel like a failure, especially in a culture where money=success. Making that shift isn’t always easy, but it’s critical if you want to take advantage of the countless work+life fit options that can help you to manage these major work and life transitions.
Let’s look at some new approaches to work+life fit and money related to retirement and deciding whether or not to work after having a child…
The New Working Retirement—the Career Asset Management Model™
As part of the marketing plan for my book, I included a demographic group I called “working retirees.” I recognized that the traditional retirement model was changing, and that more baby boomers would either want to or have to continue working in some way (Asbury Park Press 2/13/06). I believed the Work+Life Fit process could help them achieve their unique working retirement goals.
Unfortunately, few retiree-related organizations bought into my vision. So, I turned my attention elsewhere. Then one day, about a year ago, I got a call from a financial planner from Racine, WI named Mike Haubrich. He explained how he’d been using my book as part of the financial planning process with his clients. It was helping them step back and look at their career as an adjustable and manageable part of their financial planning goals.
I couldn’t believe it! A financial planner not only saw what I was seeing, he was actually using the Work+Life Fit process as part of his financial planning model! A wonderful collaboration was born.
A year later, Mike has formalized the financial planning process that integrates Work+Life Fit into the Career Asset Management Model.™ (CAMM). (Racine Times, Feb. 2006) An example of how CAMM incorporates the Work+Life Fit process into the financial planning process was presented by Bob Veres in the December, 2005 edition of the influential financial planning newsletter, Inside Information :
“If you assume that the first three years after age 60 are generating 75% of the original $150,000 salary and the next three at 60% (working part-time) and the final two at 40 % (working two days a week), factor in a six percent discount rate, and the net present value of the additional income stream comes to just under $350,000.”
In other words, it’s a way of quantifying the value of the income you would make if you strategically readjust your fit throughout retirement. And, not just quantify it, but help make that vision a reality. As part of CAMM, the Work+Life Fit process also helps people recognize and get past the roadblock of redefining success related to money, in order to feel good about the new fit they’ve achieved.
The goal is to share the CAMM model with other financial planners as a way to enhance the value they are adding to their clients who face the new model of retirement. While many will be able to navigate the Work+Life Fit aspect of the process on their own, using my book and the accompanying CAMM—Work+Life Fit User Guide, some will need extra one-on-one. To provide such support, Mike and I are also collaborating with Pauline Foster, as personal coach, to create a partnership model among client, financial planner, and coach.
SOUND INTERESTING?: You are in luck! We are looking for volunteers interested in experiencing the CAMM process for FREE. All we ask is that you share your story in white papers, speaking engagements and published articles, and also be a source for media interviews. If you’re interested, please contact Pam Kassner at pam@superpear.comor 414-510-1838 for more information.
We will be presenting the Career Asset Management Model at the 2006 Regional Financial Planners Association Symposium in May, 2006. I’ll keep you posted! But in the mean time, start thinking about your career as another asset that can be actively managed as part of your long-term financial planning.
“To Work or Not to Work:” New Work+Life “Fit” Formula
Redefining financial success also plays a key role in the decision-making process of many mothers (and more and more fathers) as they decide whether or not to work after having children.
The formula often appearing in women’s magazines compares the hard dollar costs related to working versus the hard dollar salary you would be making. The assumption is that if you are losing money, it probably doesn’t pay to work. If you are making money, then you still have to ask if you are making enough to make working worthwhile.
If you reduce your schedule, you are going to make less money. How much less money will depend upon how much of a work reduction you are making. For many mothers with a reduced schedule an evaluation of your financial reality according to the traditional formula will look bleak. The calculation based on the money you spend (e.g. child care, clothing, commuting, etc), versus the hard dollars you make, will result in a breakeven or loss.
Even if you like your job, a hard dollar breakeven or loss can make it hard to justify working, when you also like being with your kids. For some, the decision will be to stay home because they want to. But for those moms (and dads) who still aren’t sure, here’s new way to think about it—the New Work+Life “Fit” Formula. This new formula incorporates part of the Career Qualitative Value formula developed by Mike Haubrich, the same financial planner mentioned above. It includes some of the less obvious, less quantifiable, but equally valuable factors into the “work or not to work” decision-making process:
New Work+Life “Fit” Formula: Inputs-Outputs
Inputs
• Salary
• Benefits (est. value per year)
• Value of Career Knowledge Retained or Gained (est. value per year)*
• Value of Work/Community Connections Retained or Gained (est. value per year)*
• Value of Work-Related Experience/Maturity/Wisdom Retained or Gained (est. value per year)*Outputs – Direct Costs Associated with Working
• Child Care
• Commuting
• Taxes
• Drycleaning
*Not included in traditional formula
By including these less concrete, yet important factors into the traditional hard dollar equation, those on the fence redefine their financial success beyond the hard dollar. People can feel good about making less money, breaking even, or even losing money for a period of time, if it allows them to have the work+life fit they need today. If you or someone you know is on the fence deciding whether “to work or not to work” after having a child, share this formula with them. It will expand their decision-making beyond the hard dollars, and value the factors too often overlooked.“All or Nothing” Mindset Alert ! — Young Women
The local ABC affiliate in Chicago ran a story this past weekend about how more young college women plan to take time off when they have children. (ABC7, 2/1/06) Two studies were cited as evidence of the trend—the Yale study that received a lot of attention late last year and found 60% planned to cut back or stop work entirely when they had kids, and a Simmons College study of 4,000 teens found 86% of girls wanted to take a break from working when they become mothers. The story then quoted a Northwestern professor, Dr. Alexandra Solomon, who teaches courses on marriage and family, as saying this is an attempt to avoid the path their mothers took trying to do it all which they felt was too difficult.
I agree with Dr. Solomon that women are thinking about and planning at a much younger age how they are going to manage the various part of their life, but what concerns me is the idea that today dropping out of the workforce completely for a period of time is the only alternative to their mothers’ seemingly unhappy full-time path.
As I have said many times before, many of the mothers of these young women worked in a time when they had to “pay to play.” Women were still relatively new to the workforce, and there was very little flexibility offered, in part, because there weren’t the advances in technology we have today that facilitate much more flexibility.
There is nothing wrong with staying home with your children full-time, if that is the choice you want to make. However, my concern is that these young women are seeing only two choices: “work like my mother, or don’t work.” I think we need to reflect upon whether we—parents, educational institution and companies–are doing enough to point out to young women (and men) all of the countless options that do exist to creatively combine work and life throughout the transitions in your life and career. And then give them the skills they need to successfully navigate within those choices to find their unique fit beyond the all or nothing.
Join me on Tuesday, February 28th for the next Work+Life “Fit” Blog (I’m going on vacation for the week of the 21st—yeah!):
• Definition of Success – Prestige and the 24/7 Work Reality
• Personal Work+Life “Fit” Innovation — Kathleen’s Story: How Managing Her Fit Helped Her Career
If I were in the retirement space, I would volunteer for the CAMM. Fortunately, I am in the “new mother (again) space” and actively defining my “leave of absence.” My LOA actually involves some ” corporate work” – but it is the JOYFUL work that I am choosing, and I am loving it. The result has been some financial gain, but mostly the enormous rewards of being mom first, and then a working mom.