Do You Have an Accurate Vision of Retirement? If You Don’t Know Where You Are Going, It’s Going to Be Hard to Get There.

The Employee Benefit Research Institute reports that 3.6 million Americans are retiring every year. Many are rushed retire­ments due to job loss and health concerns. Only 18% of Americans believe they have saved enough, and 21% have saved nothing at all¹.

Many people think time is on their side when it comes to planning for retirement. With that mindset, it is easy to procras­tinate on setting goals. A lot of people do not know how much would be needed to live comfortably post-retirement. Some studies report a consid­erable gap between when people think they can retire and when they actually can. While many Americans wish to retire by age 50, most end up working till 65 or even 70.

Where are you headed?

Rodgers & Associates has helped hundreds of clients transition from work into retirement. Through those experi­ences, we have gained a wealth of knowledge. Finances and savings are an essential part of retirement planning. However, each person should begin with a clear vision of what retirement looks like for them. We begin every relationship with a discussion about their retirement vision. Some people look forward to traveling. Does that mean flying to exotic desti­na­tions, or buying an RV to roam the country? We ask detailed questions to help clients think through their plans clearly.

We created the AGILE phases to help people envision the entire retirement timeline. Retirement is not a date on a calendar; it is a journey that begins before our working career ends. We help to make sure the critical issues that arise along the way are covered. Our role is similar to that of an experi­enced tour guide. We want to point out areas of interest that the client may not know to look for. Having a seasoned guide can make the journey much more enjoyable.

Envisioning retirement is a critical first step. Once we have the vision, we build a cash flow projection based on what it would take to support that lifestyle finan­cially. We usually run our clients through a couple different scenarios using a range of spending. For example, a higher range of spending could support several big trips. Using ranges of spending helps to mentally “try on” varia­tions of what retirement life could look like. The ultimate objective of this exercise is to set goals—so that we can design a plan to help achieve them.

In addition to the financial objective of having a clear vision of retirement, there’s also the psycho­logical benefit of having a goal in sight. Achieving a retirement goal will take disci­pline and motivation. Motivation is what drives people toward their goals. It helps them stick to the plan and take the necessary steps along the way. A fuzzy vision of retirement life is not a great motivator. To help build excitement, we encourage clients to pick specific travel desti­na­tions for the first year of retirement.

Navigating changes in your plans

Having a clear picture of retirement is essential, but it doesn’t mean there is no room for flexi­bility. After the goals are set and the plan is built, we regularly check with clients for updates. Course correc­tions are to be expected. People change, and their plans may need to be adjusted. Changes with family members, health issues, or just a shift in interests can cause the plan to evolve. We’ve found that the industry-standard yearly meeting is usually not enough. Instead, we conduct quarterly client reviews to stay in touch. Regular commu­ni­cation helps uncover what is happening in the client’s life and enables us to offer specific recom­men­da­tions and help as challenges arise.

Having a vision provides a sense of purpose. Most successful businesses have a “vision statement” describing the company’s purpose, what the company is striving for, and what it wants to achieve in business. Many business consul­tants claim that writing vision state­ments is a rewarding and inspiring process. The same holds for planning retirement. Start with a clear vision of what you are striving for and what you want to achieve.

Insights

• Retirement planning begins with envisioning your retirement lifestyle.
• A clear vision provides motivation to follow the plan to achieve your goal.
• A retirement expert can make sure critical issues are addressed along the journey.