Fifteen retirement readiness tasks for clients

Wednesday, April 25th, 2012

In May, U.S. insurer Met Life issued a 28 page report, quan­ti­fy­ing where Amer­i­cans stand in terms of their prepa­ra­tion for retirement.

This readi­ness index mea­sures fif­teen tasks — attached to the report is a ques­tion­naire that advi­sors can take clients through to bench­mark where clients stand on each task and iden­tify areas to work on.

The fif­teen tasks for retire­ment readiness

The fif­teen tasks fall into five areas:

Activ­i­ties related to income and benefits.

This includes assess­ing when full time retire­ment will be finan­cially fea­si­ble, eval­u­at­ing the impact of changes in the econ­omy on pen­sions, invest­ments and retire­ment ben­e­fits and deter­min­ing what has to be done to receive the com­pany and Gov­ern­ment ben­e­fits that clients are enti­tled to.

Work related tasks

This makes up five of the fif­teen things to do.

These include decid­ing whether to fully retire or work part-time, iden­ti­fy­ing the options for full time or part time work in retire­ment, fig­ur­ing out if skills can be eas­ily trans­ferred to part-time work and explor­ing alter­nate career or part time oppor­tu­ni­ties in retirement.

Leisure related activities

Leisure related tasks include things like deter­min­ing the bal­ance between work and leisure in retire­ment and iden­ti­fy­ing per­sonal goals in retirement.

Rela­tion­ship tasks

Rela­tion­ship tasks to pre­pare for retire­ment cap­ture think­ing through the impact of retire­ment on rela­tion­ships with a spouse, fam­ily and friends and also con­sid­er­ing the effect on rela­tion­ships with co-workers.

Plan­ning for retirement

This includes deter­min­ing what it will take to have a sat­is­fy­ing retire­ment, iden­ti­fy­ing alter­nate plans should there be an unex­pected set­back related to health or finan­cial issues and also eval­u­at­ing whether retire­ment plans meet the demands of poten­tial changes.

Con­clu­sions on retire­ment readiness

This report reached a num­ber of gen­eral conclusions.

First, get­ting ready to retire is more com­pli­cated than just hav­ing enough money — there are many dimen­sions to a sat­is­fy­ing retirement.

In fact, the report points out that exist­ing retirees have pro­vided a road map to what has to hap­pen to max­i­mize the odds of a sat­is­fy­ing and ful­fill­ing retirement.

And sec­ond, com­plet­ing these tasks doesn’t mean that some­one should retire — but it does mean they can retire, they’re ready to retire.

The cur­rent think­ing on the tim­ing of retirement

Amer­i­cans are about evenly split on when they plan to retire — about half plan to retire at the age they’d been plan­ning to a cou­ple of years ago, the other half say they plan to work past the date they’d planned to.

Exist­ing retirees

About 64% of exist­ing retirees say they retired ear­lier than they’d expected, 33% retired when they’d expected to and only 3% said they’d retired later than expected.

The sur­vey didn’t ask if that early retire­ment was vol­un­tary — in all like­li­hood there were some cases in which com­pa­nies made the deci­sion for these early retirees.

Peo­ple feel­ing that they can retire on target

Peo­ple who say they can retire when they’d planned to were more likely to have estab­lished per­sonal goals. Estab­lish­ing those goals and then fol­low­ing through on them appears to focus peo­ple on the impor­tant activ­i­ties that will keep them on track.

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