There are many different types of retirees, and as a result, there’s no single right approach to planning for retirement. A nine-step model I’ve developed has helped me and many others I’ve coached create the “second life” of their dreams.
By leading your clients through some self-reflection exercises, they will begin to visualize the type of retirement lifestyle they desire. Here are 10 steps that will enable you to help them create a longevity plan:
Step 1: Encourage them to educate themselves
Knowledge eliminates fear of the unknown. The more your clients learn about and understand retirement and what is coming their way, the less scary it becomes. Suggest that they spend time reading books and perusing websites focused on retirement so they can get a good handle on what makes a successful second life. Increasing their knowledge about retirement will allow them to make better choices, which will lead to better outcomes. The secret to a great second life lies in the preparation for what is coming their way.
Step 2: Figure out who they are
Self-knowledge is key to retirement success. To make your client’s second life better than their first, they need to rediscover and connect with their “real self.” The challenge is that in their first life, chances are they had to be someone else in order to fit into some predefined role. Add to that the time spent taking care of their family and it’s easy to see how they could lose touch with who they really are.
In order to live a happy second life, it’s critical clients know themselves well so that they can make better choices for retirement and invest their efforts in the areas that will yield them the greatest return in terms of overall well-being.
Happy retirees are people who express who they really are — that person inside who has been trying to get out for the past 40 years. They are less stressed and happier because they have connected with their authentic self again, and their actions are aligned with their needs and values, the things they believe in.
Sample questions to ask:
- What makes you happy?
- What have been the most meaningful events in your life?
- What are you good at? What are your strengths, your skills, your superpowers?
Step 3: Figure out who they want to be
In their second life, your clients have the opportunity to remake themselves into a truer, happier, better version of themselves.
Many people, including myself, experience a welcome shift in values when they retire. Suddenly money, title and status just aren’t important anymore. We wake up to the fact that life is no longer about who has the biggest house or the biggest bank account. Our focus changes from the pursuit of more money and the acquisition of more stuff to the pursuit of rich experiences and meaningful relationships.
When our lives are no longer consumed by the pursuit of more, we realize that the most precious things in life are not things. They are the people we hang out with, the laughter we share and the memories we make.
The clearer your clients envision their future self and what that looks like, the easier it will be to get there. You want to help them create a vision for this stage of life so compelling and exciting that it pulls them out of bed in the morning, motivating and driving them towards the future that they want.
Sample questions to ask:
- Now that they have their freedom back, who do they want to be?
- What can they subtract from their life (e.g., bad habits, bad relationships, clutter) to make them happier?
Step 4: Create vision sketches for testing their lifestyle
Now that your client knows themself, they need to sketch out different scenarios of how they can make that happy lifestyle happen. This step involves dreaming about the possibilities available to them. They might not know exactly what they want to do at this point, but by sketching out some of their ideas, their creativity will kick in.
They don’t have to be an artist; doodling and drawing stick figures works just as well to depict the goals and activities they want to pursue. Or they can create a vision board using photos pictures from magazines and a few key words to construct a visual summary of their goals that is a constant, motivating reminder of their ideal second life. Non-visual clients can write down their thoughts in a journal instead.
Use whatever method works for them to create a compelling, concrete vision of their ideal second life. And remember to include their spouse or partner in this process.
Sample questions to ask:
- If their second life was absolutely perfect, what would it look like?
- Where will they be living?
- What do they see themselves doing in 10 years? In 20 years?
Step 5: Identify design constraints and potential lifestyle traps
Sometimes clients will come up with a great longevity lifestyle design but there are some concerns or hurdles attached to it. For example, let’s say they want to start a new business that requires a website, but they are terrible with technology.
A good workaround might be to outsource what they’re not good at or perhaps bring in a partner so they can focus on the parts of the business that really light them up, like selling and dealing with customers.
Assess the pros and cons of every option they consider, including the financial implications as well as the lifestyle issues and benefits. No matter what kind of longevity lifestyle they envision, they must apply some serious, critical design thinking to it, including creative problem-solving, to make it a reality.
Sample questions to ask:
- What hurdles are blocking them from doing what they want to do?
- What’s the worst thing that would happen if what they want to attempt doesn’t work out?
- What would happen if it did work out?
Step 6: Test their design prior to launch
Before making a major life change, you want to make sure that the design your client come up with meets their expectations and that they have the financial capacity to support their desired lifestyle before making the big jump. Through testing, you might find that their preliminary design needs some tweaking, or you might end up helping them see that they may need to take another route altogether.
Before your client takes the plunge and spends big money on things like an RV so they can satisfy their dream of traveling the country, suggest that they rent one for a while to ensure that lifestyle is the one for them. Or, if they are thinking of buying a franchise, one of the best things you can do is suggest that they job shadow at a franchise so they can experience and evaluate things firsthand.
Maybe your client wants to spend an extended period of time in a foreign country and they want to learn how to cook like those famous chefs on TV. A way to test this would be to travel to a place like Tuscany for a couple of months and enroll in a cooking class.
This is a great way to try out a very different lifestyle a long way from home, to assess the financial impact of life in another country and to gauge their ability to function in a foreign language. Even if they decide that’s not the second life for them, at the very least they will have had an excellent adventure!
Some retirees will want to stay in their homes for the duration, but even doing that requires some visioning and thinking through. If they intend to spend their entire second life in the home they are already in, they will need to come up with a design solution to accommodate them as they safely age in place.
You need to suggest how they can test each lifestyle scenario you sketched out. Evaluate the advantages and disadvantages for each design you created, using a cost-benefit approach to weigh both the risks and the opportunities.
Step 7: Create their weekly schedule
The average retiree spends 48 hours per week watching TV. If you add to that the time that they spend daily on social media that’s more than the average full-time job spent sitting in front of a screen. This is probably not what your clients want their retirement years to look like. Unfortunately, this is the default for many people who do not plan ahead and schedule their time intentionally.
Often, people who are used to full schedules in their working years go into shock when they suddenly retire and suffer from boredom when they find their weeks empty. That’s why they need a schedule filled with a variety of interesting, challenging things to do.
Creating a weekly schedule puts structure and routine back in their life. By establishing a weekly schedule, they are making time for the things that are most important to them.
They need to identify their priorities. These are their nonnegotiables, the activities that will satisfy their most important fundamental needs. Each client’s list will be different depending on their biggest priorities, but here are a few ideas to get them started:
- Time with family and friends.
- Time for work.
- Time for exercise.
- Time for learning new things.
- Time for play and adventure.
Make sure they schedule in the fun things that make them happy and really light them up. And be sure they schedule in the important dates like birthdays, anniversaries and other special occasions that they want to celebrate.
Their schedule should have a good mix of different activities to keep life interesting, challenging and fully engaging. Retirees have to have variety in their lives; it’s a fundamental need. No one wants live the same day over and over for the next 30-plus years.
Everyone has their own definition of what a perfect day looks and feels like, but in general terms it involves a little work (or pursuit of other important activities or goals), a little play, a little exercise and some time with friends and family.
A common mistake for many retirement “newbies” is being in a hurry to accomplish everything on their bucket list and trying to do too much in a short space of time.
Our goal in retirement should be to reduce stress, not create more of it. So, they should start slow, find their own comfortable pace and avoid overscheduling themselves.
Step 8: Set goals
Now that they have a vision of their ideal future, it’s time to set some clear goals to help get them there. Concrete goals are important for retirees because they provide a sense of purpose, much-needed structure in the face of all that free time and a feeling of accomplishment.
Ask them to think about the goals they might want to accomplish in the first five to 10 years of retirement. For example:
- Do they want to lose 30 pounds, quit smoking and get healthy again?
- Do they want to find meaningful work that will make them happy?
- Do they want to travel to a bike camp in Spain for a week and ride in the mountains?
Whatever their goals are, they need to get them down on paper and keep them in a place where they can see them every day. Unwritten goals are soon forgotten about. Specific, clear goals with timelines attached will get them to where they want to go.
Breaking each goal down into smaller steps will make it feel more manageable and they will get a huge sense of accomplishment once they start achieving those smaller objectives, step by step.
Step 9: Cost out the winning design
Now that your client knows what their ideal second life will look like, you can help them figure out how much that lifestyle is going to cost and then ensure they have sufficient retirement cash flow to support it.
One problem with financial planning for retirement is that it often assumes a retiree’s level of spending will be the same year after year. But in real life, it doesn’t work like that. Michael Stein, author of “The Prosperous Retirement,” came up with the concept of a three-phase retirement to more accurately describe what spending patterns and costs look like throughout the retirement years. He calls them the go-go years, the slow-go years and the no-go years.
In their go-go years, retirees are in good health and eager to do all the things they didn’t have time to do when they were working. Because of this increased activity in these early years, many retirees will spend more than they did before they retired.
Eventually, depending on the state of their health, retirees hit their slow-go years. They become less energetic and more sedentary, which results in less spending. Their health limits their energy level and they will travel less, be less physically active and may stay in for dinner rather than go out.
At some point, many people enter their no-go years when they experience a further slowdown in activity levels. In this phase, medical costs may rise significantly.
Step 10: Establish a legacy
For many of us, the COVID-19 pandemic spurred a re-evaluation of our values and priorities. We were given a lot of time to take inventory of our life, to think about what is truly most important to us.
When I used to think about my legacy, it was about having a will and leaving behind as much as I could for my kids. But when I think about my legacy these days, everything I do is for meaning, not money.
Help clients consider how they want to be remembered, and what they will have left behind to support the important people in their life — not only financially, but emotionally.
A life well lived is a life that you can look back on with both joy and satisfaction — and without any regrets.Each of us has the power to choose the kind of life we want to live. Choose to be happy or choose to live with regret; the choice is yours alone.
This article is based on an excerpt from Mike Drak’s latest book, “Longevity Lifestyle by Design.” Mike is a retirement coach and a 38-year veteran of the financial services industry. He’s the author of two other books on retirement. He works with his wife, an investment advisor, to help clients design a fulfilling retirement.
