"Never before has mankind had 20 extra years" to live after retirement, according to Gary R. Jay, a certified retirement coach and owner of Remarkable Resource. "How do you plan for that?" he asked.
Jay, who works with financial advisors to give them skills to help clients transition into what he calls the Third Age, said our ever-growing retirement-age population is "at an explosion point."
"There's been a bottled-up need to do more planning around this time of life," he said. "This need has been created within the last generation, due to miracles of science increasing longevity and [the fact of having more] women in the workplace and more money to spend in the household."
Financial advisors are on the front lines of this explosion, say both advisors and consultants.
"As financial advisors, we are often the only professionals that people consult when preparing for retirement," said Howard Pressman, a certified financial planner with Egan, Berger & Weiner.
"Over the past three years, I noticed that, despite all the planning, some of my clients—about 25 percent—still weren't happy," he said. "I came to realize that there's a difference between being financially stable and being happy."
Pressman said many of his clients were "left with a void."
"I could see changes in their personality," he added. "They told me, 'I'm having trouble with this.'"
As a result, Pressman began to incorporate more of the psychological side of retirement into his practice. He took a three-pronged approach by:
"Post-career, post–child rearing is a sweet spot of life," said Kathleen Roth, certified financial planner and partner with Waterstone Partners. "It's also a period of turbulence, much like adolescence."
Roth called early retirement "uncharted territory, with a considerable amount of unpredictability and fear."
"Health changes occur with greater frequency with age," she noted. "Relationships change—too much togetherness, empty nests, divorce [and] death—and, unfocused, people can spend a lot of time, money and effort filling time without satisfaction."
Coming to believe so-called "transition psychology" plays an important role in planning for retirement and other life changes. Roth became one of a few advisors to earn the Certified Financial Transitionist designation from the Sudden Money Institute.
Some say the whole notion of retirement must be reexamined to successfully work through this transition.
"Formerly, the concept of retirement was a 20- or 30-year vacation," said Keith J. Weber, a consultant to financial advisors and president of Weber Consulting Group. "But in reality, retirees become very bored [because] they still want to be engaged and active."
Thus, one of Weber's areas of expertise is helping advisors work with clients to create satisfying retirements.
"A large proportion of baby boomers will not be able to afford to retire the way they'd like to," he noted. "They have no choice but to continue working or retire at 62 with Social Security. It's very different than the dream."
Weber's prescription for them? "Find something you love to do, and do it for as long as you possibly can, whether you must work or not," he said.
Weber has identified activities people should pursue within six "life arenas" to have a rewarding retirement:
In order to enter helpful conversations around retirement visioning, he counsels advisors to develop a different mind-set, too.
"Many financial advisors expect to be the experts, but it's not about having the answers; it's about asking the right questions," he said.
And there are three types of such questions, Weber said. What he calls Level I questions are those with specific answers. For example, "How much?" or "When?" Level II questions deal with personal values (e.g., "What's important about X?"). And Level III questions relate to one's personal legacy (e.g., "How do you want to be remembered?").
The bottom line, Pressman at Egan, Berger & Weiner said, is to "get clients to start thinking about what they want as soon as possible—so we can put a dollar amount on their future lifestyles."
10 tips to planning a successful Third Age
Source: Gary R. Jay, Remarkable Resource