Support for the 10 Questions to Prompt the Retirement Thinking Conversation

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Support for the 10 Questions to Prompt the Retirement Thinking Conversation

August 2015

Support for the 10 Questions to Prompt the Retirement Thinking Conversation

You have a new hat to wear and role to play – you are now a retirement facilitator and a pension co-ordinator for your Canadian clients.

Each of the 10 questions highlighted below were drafted to prompt dialogue between you and your client(s) and also amongst your clients concerning a particular aspect of retirement.

Questions lead to thinking and dialogue, dialogue leads to insight as to concerns or opportunities, and opportunities will motivate your client to act and you to demonstrate value.

  1. If you retired last month, how would you spend your day today?
    • Lifestyle vision - Do your clients anticipate a more relaxed lifestyle when they are not tied down by work timeframes or do they want to jam as many life experiences in while they are healthy and able-bodied?
    • Moving - Are your clients happy in their current house or are they looking forward to maintenance free condo living or moving locales?
  2. How are you going to keep your mind engaged and happy and your body active and healthy?
    • Extra time each day - Your clients will have an extra 8-12 hours to occupy. Have they thought about how, where and why? After the initial retirement honeymoon, life that is entirely leisurely or unstructured generally stops being leisurely and becomes tedious and boring.
    • Do your clients have outside interests from their working/career days that will carry-over into retirement? Consider travel, fitness/nutrition, philanthropy or other interest clubs.
    • Do your clients anticipate “phasing into” retirement over a number of years? Do they plan on working part-time or consulting for a few years?
  3. In the last 10 years, have you ever been unexpectedly off work for more than four weeks?
    • Fake retirement experience - Have your clients ever experienced a fake retirement? Have they been off work for four weeks without vacation type plans and spent the time around home or out and about doing daily mundane tasks? Have they tracked what they liked or disliked about the whole experience?
    • Planned or unplanned triggers - Over half of today’s Canadian retirees retired earlier than expected due to health issues or work reorganizations which are unplanned triggers. Have your clients considered the impact of unplanned triggers on their retirement lifestyle vision?
  4. Are you married or in a common-law relationship? If so, have you ever asked your spouse what they want out of retirement?
    • Communication - Have your clients discussed their respective vision of retirement with each other to determine if they are on the same page or have similar expectations? It is not uncommon for couples on the cusp of retirement, and in the first few years of retirement, to discover their respective visions were not similar and such differences impacted their relationship. It is better to be on the same page than to receive an unpleasant surprise. Incidentally, this question prompted the most discussion for clients 55+ years of age.
    • Together 24/7 - Prior to retirement, spouses were not together 24/7. If both retire at the same time, or upon the second to fully retire, all of a sudden they are together all the time and will have to adjust to a new routine and manage each other’s expectations.
    • Three “clients” to consider - Client A, Client B and Couple AB. It is important that each client has individual pursuits and interests and also that the couple has joint activities to enjoy during retirement.
  5. What is your biggest fear about living in retirement?
    • FUDD (fear, uncertainty, doubt and denial)
      Are your clients concerned about running out of money, having health issues or being bored during retirement?
    • What tools do you have to combat client FUDD? It is human nature to procrastinate, defer or deny when fear or uncertainty comes into play. Without a vision of retirement clients, and we as advisors, will not have an idea as to what their needs or wants are. We cannot map out or investigate options and alternatives on how to fulfill their vision of retirement, nor possess the knowledge of choices available. Addressing FUDD leads to thinking and thinking leads to planning.
  6. Family – parents, children and spouse – do you support any of them financially or physically? Do you anticipate supporting them in the future during retirement?
    • Competing demands for retirement savings - Canadians are being squeezed by time, finances, emotions and the physical demands of caring for their aging parents and their boomerang children. Canadians also don’t make the time to “think” or contemplate retirement, perhaps given their regular day-to-day stresses.
    • Inheritance - Many Canadians are counting on an inheritance to fund retirement. Is this realistic? Some Canadians are concerned about the financial burden of caring for their parents while others are concerned about children returning after university, given their inability to start their careers or afford housing.
    • Sale of principal residence - One in three Canadians anticipates the sale of their current principal residence, to some extent, to fund their future retirement. Is this realistic? How many of your retired clients, who have down-sized in the last five years, have managed to save at least 25% of the proceeds and apply it towards retirement?
  7. Rank your top three financial priorities today. Rank your top three financial expenses.
    • Match - If your clients’ priorities do not match their expenses, is their future aligned with today’s reality? Additionally, if retirement does not appear on both lists it is not a priority, nor is it being considered.
    • The dynamic consumption and savings equation - The more clients spend today, the less they will have in retirement or the less they spend today, the more they will have to fulfill their retirement vision.
  8. What was the most significant, unexpected expenditure you faced in the last 12 months?
    • What if - Did your clients’ house require a new roof, did they have to cover a major car bill or need to fly across the country due a family emergency? Do your clients’ retirement plans incorporate flexibility to accommodate such unexpected expenditures? Life happens and when you are no longer working a surprise expenditure may impact retirement capital available to fund future lifestyle significantly. Plan for the “what if’s.”
  9. Do you know how much you spend on medical, health and dental services on average in a year?
    • Money spent on services - Do your clients have an idea as to what they spent on such services over the last few years that were perhaps covered by employer-insured plans? Upon retirement do they have to cover off the costs of health, dental, chiropractic, eye glasses and other previously insured services?
    • Health/dental insurance - Can your clients replace their employer plans upon retirement with a self-funded plan that is prudent and economical? Do they have the ability to continue and pay for their former employer’s plan out of pocket?
  10. What are you willing to sacrifice or trade off to fulfill your retirement vision?
    • It is a known fact that the majority of Canadians under the age of 50 have not contemplated retirement and their priority is living for today. Those that have initially thought of retirement have a different retirement vision than their parents. Canada’s sandwich generation believes they will be more active, healthier and live longer in retirement. If clients have not thought of retirement, is it in the cards?
    • Plan - If a client has not thought of retirement, they do not have a plan. Without a black and white plan clients tend to over/underestimate economic predictions, overlook “what if” scenarios or stress test assumptions and don’t hold themselves accountable for decisions that they make today.

Every client is unique and will have different thoughts on retirement. The above questions can be used to prompt your clients to anticipate what they want from retirement, envision what living in retirement will be like, and think and talk about how they see themselves during this time.

Publish date: 
August, 2015

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