I've been in the retirement planning industry for almost 25 years in many different roles but the one question that has come up more often than not is “How much is enough?” How much should you save for retirement? How much do you need in retirement? How much will you spend in retirement? How much can you afford in retirement? These “How Much?” questions are all integral questions that will come up in the retirement planning process.
After all, when you think about retirement you can't help but think about money issues. This is why the financial industry has become the key source of retirement information. If you wanted help with a retirement plan, you would probably go to a bank, a financial advisor or someone in the financial industry because you can't help but link money and retirement together. For these reasons, retirement planning has been overly financially biased.
Retirement is about more than just money
I've often said, retirement is about more than just money. In fact true retirement success comes from one’s ability to bring both money issues and lifestyle issues together in harmony and integration. For some people this harmony is not reached. For example, some people have dreams too big for their wallet. Others have a different problem where they may have enough money but don't know how to spend it. Some people spend a lot of time focusing on the money issues but not enough effort on what they are going to do with their time. Can you think of someone that retired only to find that they had too much time on their hands and were bored in retirement?
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Designing your retirement lifestyle
As you head closer and closer to retirement, retirement readiness becomes a bigger and bigger issue. As a result, the baby boomers are really starting to change the way we look at retirement readiness. To be ready for retirement, all boomers should spend some time thinking about lifestyle issues in addition to their money issues. I'm so happy to see that one of the big banks, RBC, has stepped up with a new Retirement Designers Campaign focusing the message on lifestyle retirement planning instead of just money.
RBC's retirement design expert, Bill Hill says “Too often, the word ‘retirement’ is tied to the money, rather than to the life you hope to lead when you retire.” Mr. Hill is also host of a reality webisode about the story of Ron and Gillian who are almost ready for retirement. Mr. Hill walks them though the process of designing a retirement vision and even giving them a taste of that vision as a reality check on their plans. I think it’s a great video for pre-retirees.
Develop your retirement vision
As you get closer to retirement planning, boomers need to switch gears a little and start thinking about lifestyle planning over financial planning. It's not that money issues are not important. Mr. Hill explains “The money is important, but first anyone approaching retirement needs to ask themselves, ‘what’s most important to me when I’m no longer working? How will I want to spend my 2,000 hours a year?’ We’re hoping our webisode gets some of those conversations started.”
For me, it's about developing a retirement vision. As part of this campaign, RBC has developed an interactive tool to get the process going.
The RBC tool is a great starting point. It takes pre-retirees through a series of ‘life’ categories, to understand where they see themselves, and how they envision spending their time once they’ve reached this milestone. The tool is a simple way to get your mind thinking about other issues and also to get conversations going.
True lifestyle planning requires a good sense of detail. You may have to sit down and talk to someone who does retirement planning who does not have a pure money focus. Sometimes just talking to your spouse can be a great starting point about your retirement dreams and wishes. Other's may prefer some solitude to set their goals and dreams in place. Whatever the strategy, you must remember that retirement planning is about understanding more than money issues. It's important to think about designing your retirement lifestyle.
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