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The Mortality Paradox

How fear of death affects financial planning

By Jim Morrison

Failing to simply acknowledge your mortality could be costing you money and happiness.

Experts say people who avoid thinking about the inevitable could be short-changing themselves out of a full and comfortable retirement. Gergana Nenkov and Linda Salisbury, associate professors at The Carroll School of Management at Boston College say they’ve hit upon the reason why and may have gained insights on how financial planners can better help clients acknowledge their mortality simply by changing the way they talk about it.

Financial planners who understand how to address issues surrounding the fear of death will be better able to serve their clients and themselves by building investment strategies that help clients meet their goals, without accidentally upsetting them.

Nenkov and Salisbury set out to study a financial puzzle that has plagued economists for more than half a century. While annuities can be a valuable component of many peoples’ financial plan, many economists think they are less popular than they should be. They just can’t figure out why.

“We had the idea that maybe people are averse to annuities because it requires them to think about the end of their life.”

According to Nenkov and Salisbury, none of the current theories fully explained the phenomenon.

“We had the idea that maybe people are averse to annuities because it requires them to think about the end of their life and thinking about dying can be upsetting for some people,” Salisbury says.

For their study, the researchers designed two brochures describing an annuity investment with one small alteration in the wording to test their hypothesis. “One brochure said the investment will provide you a steady income until you die,” Nenkov explains. “The other brochure said it will provide a steady income for as long as you live.”

On average, 11.5 percent more people were interested in the annuity described in the second brochure.

According to Salisbury, older people tend to be more comfortable with their own mortality and it varies by culture as well.

“Maybe there are some financial instruments that help people cope with this idea, like endowing a scholarship or a building or bequeathing something to your children?” Nenkov says. “In a paper we haven’t published yet, we found some evidence that offering people an annuity they could bequeath to their children relieved some people’s anxiety about death.”

Nenkov says the right kind of financial planning might even help people accept their own mortality.

“Another way we talk about it is: the client’s legacy. Dying isn’t the end of your plan, it’s Phase Two.”

Financial planner Toni Grimm, of Sandy Cover Advisors, says when she encounters a client who is uncomfortable with mortality, she has several ways of working around it.

“What’s interesting is that when we do planning and cash flow planning, we sit down and use software that automatically enters your life expectancy at 95,” Grimm says. “Most people think they don’t want to live that long. And using humor can diffuse the anxiety. Another way we talk about it is: the client’s legacy. Dying isn’t the end of your plan, it’s Phase Two. We direct the conversation toward the client’s want for their children and grandchildren.”

According to Grimm, people sometimes come to her out of anxiety, but after seeing the plan crafted from a comprehensive analysis of their finances, they are often visibly relieved.

“Sometimes, you have a husband and wife each who has a handle on different portions of their life, Grimm says. “You can see the stress. We put the whole plan on the flat screen and run through the scenario. You can watch the body language change and the shoulders relax and the cadence of the conversation slows down and gets lighter. They feel empowered with information.”

On the other hand, the cost of not planning, can be very high.

“From time to time we see a person who at some point in the last market got nervous and pulled everything out and put it into cash,” Grimm says. “Then they come to us three years later because they’ve missed out on incredible gains and it’s more than dollars. They’re embarrassed. It might be the breadwinner in the family who made the decision and is trying to protect the family. They feel like they pulled out of the market and let their family down.”

Failing to make a plan and execute it can cost more than money, too.

“We had a new client come to us recently who was older and updated her estate plan,” Grimm says. “Sadly, she never took the final step to title her accounts and she got sick and died. Now her heirs have a very complicated situation to sort out which has caused a lot of stress and anguish which is exactly this woman was trying to avoid.”

Acknowledging your mortality can be unpleasant, but it can actually deepen the meaning of the time you have and help prioritize that plan.

Jim Cote, of Concord Wealth Management, takes a similar approach. His software automatically pegs clients’ lifespan at 90 and if people have reason to think it should be adjusted up or down, he does so. He says his training is in financial planning, but he often feels like he’s part therapist.

“Sometimes with a couple, one of them might be scared and it becomes like counseling,” Cote says. “We ask them why they’re afraid. I find many Baby Boomers have lived a great life and don’t want to think about their eventual death.”

When people let fear keep them from creating a sound financial plan for the end of their life, it can sometimes be too late.

“The cost of waiting is astronomical and dangerous because it can make people into gamblers, taking dangerous risks with what money they do have to try to catch up,” says Cote. “The key is systematic savings. If we can get someone to put 10-20 percent of their income in the market, at the end of the day they’ll have money. If they wait until they’re 55, we can work with them, but they’ve put themselves in a hole.”

Cote says solid, comprehensive financial planning should be about planning to live well for as long as possible.

“We get the conversation going,” he says. “Creating a sound financial plan is a process. You have to go through the process and at the end, people are relieved. They’re grateful. Often, they didn’t realize they had so many options. There are very few cases where we can’t at least help a person. It’s always worth a conversation.”

Both financial planners say creating a solid financial plan and executing it are two critical components of a long and happy retirement. Acknowledging your mortality can be unpleasant, but it can actually deepen the meaning of the time you have and help prioritize that plan.


About the Writer

Jim Morrison (Bucket Age – 35) is a freelance writer whose work has appeared in The Boston Globe, The Boston Business Journal, and hundreds of publications across the country. His book, Home Buying in 30 Minutes was published in November 2018.  Jim once spent a couple of weeks in the Kenyan bush with researchers trying to catch lions in the act of coitus -and succeeded. He can be reached at

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