Help Clients Create a Retirement Vision

Help Clients Create a Retirement Vision

by Kol Birke, CFP

To help clients achieve their ideal retirement, financial advisors need to understand their retirement vision, as well as their financial situation. Without this vision, your clients won't know what their financial needs will be—or the steps to get there.

Here are a few ideas and conversation starters to help you—the trusted financial advisor—delve more deeply into what your clients truly want.

Educate and Reassure

There's a lot to consider when preparing for retirement. Clients can, understandably, become quickly overwhelmed. To begin, create a low-pressure and supportive environment when you raise the issue.

Next, educate clients about how to think about their golden years. You may start by sharing that most research outlines three major factors for a happy, successful retirement:

1. A support network of family, friends, and community
2. Physical and mental health
3. A sense of purpose through work, volunteering, sharing knowledge, learning, or other activities

Ask clients to describe how their retirement lifestyle will fulfill each of these three needs. Prompt your clients to read books about retirement—or even speak with a few of your clients who retired recently—to get a more detailed, tangible idea of what they'd like their retirement to look like.

Retirement is a major transition—and transitions can be tough. Reassure your clients that they aren't alone in finding this process difficult. Also, make sure that clients understand that retirement has changed dramatically in recent years. Their retired years may differ greatly from their parents' or friends' experiences.

Ask Big Questions

George Kinder, a pioneer in the field of life planning, suggests asking three questions to help clients articulate their retirement vision:

1. If you had all the money you could ever need, how would you live differently?
2. If you had only five years to live, how would you use this time?
3. If you had just 24 hours to live, what would you feel that you did not get to do or be?

You could also ask clients to plot one week's worth of activities during retirement—a surprisingly difficult task.

These questions and exercises will help you—and your clients—gain a clearer understanding of their desired lifestyle. Asking the big questions is useful for you as the financial advisor to understand your clients' attitude toward retirement—and how you can best approach future conversations.

Identify and Test Goals

Ask clients to list their goals for retirement. If clients name vague ambitions, such as "travel" or "spend time with family," ask them to refine these. They may decide, for instance, that they want to travel internationally once per year or take one grandchild out to eat every week.

Once your clients have defined their goals, test them. Maria Nemeth suggests in The Energy of Money the importance of determining the intention behind each goal. Namely, what purpose does it serve? Is it the most effective way of accomplishing that purpose? How does the goal fit into the larger vision?

For example, if a client is budgeting $30,000 to travel every year, find out what purpose that serves. Maybe he or she is looking to explore other cultures or wants to escape the boredom of daily life. There may be other ways to accomplish these goals; make sure your client thinks about these other options.

Test your client's willingness to follow through in making this goal a reality. You may want to ask the following questions:

1. I want to make sure that I understand. You want to save $700 each month so you can travel internationally three times per year once you retire, correct?
2. Is there anything that would take priority over saving this $700?
3. Would you like me to say or do anything if you aren't saving toward retirement travel? What would be most helpful and not feel like nagging?

By testing clients' goals, you will understand exactly what they want. When they give you instructions on how to help, they'll accept your guidance more readily.

Envisioning retirement isn't easy; it requires honesty and patience. As a financial advisor, guiding clients through the process of defining and realizing a retirement vision will help ensure that their golden years are happy and well funded.