Many financial planners focus on helping their clients accumulate the necessary financial assets for retirement, but they also need to help their clients transition from their working lives into retirement living.
Financial planners can help their clients envision and plan for their preferred retirement lifestyles by exploring client preferences about where they will live, what they will do with their time and how they will look after their health. This process will help the client mesh their financial strategy with their lifestyle choices.
Here are some sample questions that a financial planner may pose to their clients in order to assist them with either the decision to retire, or to assist in planning their life after retirement. By asking these questions and listening to their clients’ answers, financial planners may better tailor their advice to meet their clients’ priorities:
> Do you want to help your children or grandchildren with the cost of education or weddings?
> Do you want to buy a vacation property?
> Are you going to sell your home and downsize to help finance your retirement?
> Will you start a new hobby?
> Will you volunteer?
> Will you work part-time?
> Will you further your education?
> Will you be a one- or two-car family?
> How much will you travel?
> Will you start a second career?
If your client needs a detailed retirement plan, then add a lifestyle component to the financial aspect by focusing on the 10 major areas of life:
- Family
- How does your immediate and extended family fit into your plans?
- Self
- What do you consider important in life?
- How is your health?
- What is your financial situation?
- What are your personal goals for retirement?
- What do you fear most about retirement?
- Social
- Do you have friends that have already or will be retiring at the same time as you?
- Will you miss the social contact that came with your job?
- Leisure
- Do you plan to travel the world?
- Do you plan to pursue a hobby or spend more time with grandchildren?
- Work
- Many individuals obtain a sense of identity from their jobs. So, what will you miss most about your job?
- Will you work part-time?
- Spiritual
- How will your personal support system help or hinder you from making a successful transition into retirement?
- Relational
- If you and your spouse both worked and only saw each other in the evenings and on weekends, will you be able to adapt to being closer together?
- Do you plan to move to be closer to your children and grandchildren?
- Cultural
- Does your background place various expectations on you as you get older?
- Will you be taking care of older family members?
- Are you expected to continue to be actively involved in your community?
- Community
- Does your community have adequate health-care services for you in the future?
- If you do move closer to your grandchildren, how do you think it will work out? Will the new town have adequate transportation and health care?
- Financial
- Have you estimated the costs associated your retirement choices and are you able to retire and achieve these choices?
Understanding these various factors that are important to their clients allows financial planners to align their clients’ financial plans with their plans for their retirement life.
Financial planners who adopt lifestyle advice to their service offerings to clients can distinguish themselves from the competition and add additional value to ensure clients can enjoy their hard-earned retirement savings in a retirement lifestyle that meets their expectations.
Planning for and managing the transition of the baby boomer cohort to a post-working lifestyle will be one of the great challenges in the coming years but, at the same time, a great opportunity for financial planners who embrace lifestyle planning.