16 Questions to Spark a Retirement Planning Conversation

2. How confident are you that this goal is achievable?

This is a good follow-up question — once you have that number, the money will need to come from somewhere. Social Security, fixed pensions and annuities will bring in some income, but clients are responsible for providing the rest. That income gap should be filled by the return on their retirement and investment assets.

The Monte Carlo analysis is a good tool for looking at the probability they will reach their goals based on their current retirement savings and investment strategy.

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3. Are you willing to work longer? Save more annually? Retire on less income?

Very often, the Monte Carlo analysis finds that the client will run out of money during retirement. There are solutions, and the obvious ones are listed in the three questions you just asked.

In many cases the client does not want any of those alternatives. You have established there is a need, and that need will not go away until it is addressed.

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4. Would you be interested in a plan that increases the probability you will achieve your goals?

This is a good follow-up when the client does not like any of the three options you have proposed.

This leads into your proposal, likely including a different asset allocation and risk tolerance. It might show a higher probability of reaching their goals, but clients need to understand the risk involved.

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5. What do you plan to do on your first day of retirement?

This question takes a conversation with clients or prospects into a different — and softer — direction. They might say, “On the first day of retirement I am going to book a cruise.” They might talk about becoming a full-time volunteer with a local charity or spending time watching their grandchildren.

Getting them talking gives you clues how much their future planned activity is likely going to cost.

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6. Do you remember freshman year in college?

At that time, graduation seemed a long way off. Fast forward to senior year. When you looked back on your college years, did you wonder where the time went? Time seemed to pass so quickly.

This sets up the analogy for retirement planning. Retirement might seem so far away, but it sneaks up on you. One day, it will seem a lot closer than you thought.

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7. What do you see retirement looking like?

This is another variation on earlier questions. You know what your clients’ lifestyle looks like today. Do they see retirement as spending at the same speed, just with more leisure time? Do they see retirement as another form of work, with a different employer? Do they see themselves starting a business?

This gives clients the opportunity to draw a picture with words. You can help apply a price tag.

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8. How do you prioritize financial independence?

Many people wish going to work was a choice, rather than a financial requirement. Some might see working as an uphill climb, enduring the climate of corporate reorganizations and getting new bosses. Retirement can seem a long time away, but financial independence could happen at any time.

Another way of achieving financial independence is reaching your retirement goals earlier than expected. If they can afford to retire now, then continuing to go into work is a choice they make.

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9. Can you envision the three stages of retirement?

UBS produced an excellent report making the case there are three stages of retirement. The first stage looks similar to working, in which you might go into consulting within your industry. The second stage involves travel and leisure, and the third stage involves illness or medical issues.

The third stage is grim, but it needs planning. Talking about the three stages can get clients to open up about how they see retirement unfolding.

10. What did your parents’ retirement look like?

They will likely remember. Defined benefit pension plans might have been part of the picture. Were they a one- or two-income family? Did the family own a business? How long did they live in retirement?

This conversation can open the door to talking about how retirement “then” is different from retirement “now.”

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11. Do you plan to work forever?

Some people do. They might be the primary breadwinner in the family. They might have little in savings. They might live a lavish lifestyle — whatever comes in also goes out. Their grown children might not be planning to leave home.

There will come a time when one can no longer work. It might involve passing away. How will the income be replaced? You have started the discussion.

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12. What is the succession plan for your business?

This client might run a drycleaning business as a one-person show, or maybe it is a family concern. The business has loyal customers and produces a steady income, but it needs to open each day.

What happens if clients are no longer in the picture? Is selling the business an option?

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13. What do you think will be your largest expense in retirement?

According to AARP, the biggest expense will be health care. People need more medical attention as they get older. Medical costs often rise faster than the rate of inflation. Supplemental insurance premiums rise as you get older, and long-term care is generally not covered by Medicare.

Clients cannot assume they will stay healthy forever.

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14. Where would you like to spend your retirement years?

We might assume that because the clients always lived in the city that they want to stay there. Instead, they might desire the beach life or relocate to a small town.

This question opens up the conversation to consider moving somewhere with a lower cost of living.

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15. What have you told your children about saving for retirement?

Retirement planning makes sense in principle, but it’s easy to “Do as I say, not as I do.” Clients might have told their children to maximize their 401(k) contributions and “leave the money alone.”

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16. Have you considered your retirement as moving in with your grown children?

In some cultures, multigenerational families living together is the norm, with grandparents caring for the youngest so parents can focus on their careers. Other cultures believe in raising children, sending them to school and their moving out to start their own families. Clients would not want to be a burden, and their children might not be enthusiastic about becoming part of the “sandwich generation.”

If clients do not want this to happen, they need to take steps to maintain their independence.

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