Retiring investors are not just worried about money. They are also nervous about entering that next phase of their lives, according to research from Global Atlantic Financial Group.

“In all the research and the conversations that we had, people said, ‘I have never felt so fragile, not only with my money but with my emotions,’” said Jeannie Underwood-Kotner, senior vice president and head of Global Atlantic-Consulting, a practice management division of Global Atlantic Financial Group.

Underwood-Kotner said her firm has created a “conversation blueprint” for financial advisors to have more meaningful and productive conversations with their clients as they enter the “Fragile Decade”— the five years before and five years after retirement.

Underwood-Kotner spoke today during the Next Chapter Rockin' Retirement virtual conference sponsored by Financial Advisor, the Money Management Institute and the Execution Project. She explained that the blueprint was built in part on research from the Financial Transitionist Institute, founded by Susan Bradley, known for her work with the Sudden Money Institute. Bradley’s team, she noted, has been working with financial professionals for more than 20 years on improving communication and empathy skills and working with clients through major transitions.

Bradley’s team, Underwood-Kotner said, has found that with any transitions, there are four stages: the anticipation stage, the ending stage, the stage of passage and the new normal.

But the retirement blueprint, she said, was mainly built around the anticipation stage, which is the moment you know some aspect of your life is going to change. This stage also corresponds to the first five years of the fragile decade, she said. In the next five years, after the end of work and during the passage stage, you start to tiptoe your way into your new life, and then to the new normal.

Those years are not only fragile for investors, but for their financial advisors, too, Underwood-Kotner said: “When people are saving for retirement, especially in their working years, they are working with between three and five financial professionals on average.” She added that people moving closer to retirement start consolidating work with one financial professional. “And so, with that stat in mind, we built this conversation blueprint to put you all in the best position to be that one advisor."

Atlantic Global has a five-year checklist for advisors to make sure they connect with clients at critical points in their relationships. “So, every year, you can start the year and say, ‘OK, this year these are the things we are going to cover and make sure we have covered so the day you step into retirement you rise and thrive.” Clients appreciate these checklists, she added.

The five-year checklist for advisors and clients looks like this:

Year 1
Underwood-Kotner reminded the audience that people are living longer. Their first year in retirement is your first with them in a journey that will possibly last 30 or more years. The No. 1 item is:
• Start the income plan conversation. Here, she said, it’s important to use the words “income plan,” not “retirement plan.” “When we talk about retirement plan, to them it’s not the same. They need to hear ‘income plan.’” Clients like to be reassured that their retirement income will not skip a beat even though the actual paychecks have stopped.
• Review their retirement budget by looking at the average American’s budget. We spend money differently and our bills are allocated differently in retirement, she said. “So, start showing [the client] that information so that they can start planning that budget and get an idea of what that budget looks like in retirement.”
• Start a retirement budget.
• Start an annual spending audit and a spring-cleaning checklist. “Everything is so digital these days, and I think people really and truly lose sight of their spending because of this digital age. So it’s really important for people now to start getting a grip on how they are spending their money.”

Year 2
• Explore ideas for the future. This is where the conversation really begins, she said. “Let’s sit back and envision retirement.”
• Assess the client’s long-term-care need. Underwood-Kotner said more people, especially women, want to engage in this conversation.
• Assess the client’s life and disability insurance needs.
• Assess their healthcare options. Advisors should make sure that they are addressing healthcare options with clients because it’s always among the top five things they want to discuss.
• Look at pre-need planning for funerals. Funeral planning, especially in the wake of the Covid-19 pandemic, is a popular topic, she said.
• Create an estate planning checklist. These are items to start the organization process, so you don’t have to worry about it once the client enters retirement.
• Continue to foster spring cleaning.

Year 3
• Discuss with clients where they are going to live. This is a big item in the overall retirement plan, Underwood-Kotner said. “Are they going to age in place, are they going to be snowbirds, or are they going to get up and move South?”
• Plan home upkeep. For clients who are going to age in place, identify the big-ticket items they will need, such as the repair of their roof, furnace, plumbing, etc., before their paychecks stop.
• Refinance mortgages or home equity loans: Get this done while the clients are still working.
• Have the client do a spring cleaning.
• Rerun and review your client’s retirement income plan and start testing it out from this point forward.

Year 4
• You and the client should discuss tax strategies, and possibly include a tax professional. This is another top five item for clients. “People want to make sure they have tax-smart strategies in retirement,” she said.
• Practice retirement: At this point, even though clients haven’t retired yet, they should pretend they have stepped into it. They should spend as if they are retired, see how it goes and then adjust.
• Encourage clients to explore “phased retirement.” This makes the transition healthier, she said, explaining that it’s difficult to go from working 40 hours a week to nothing.
• Continue spring cleaning.
• Rerun and review the retirement income plan.

Year 5
This is the last year before the passage stage, where the shock and awe of retirement starts to wear off and the clients are trying to figure out what their new life looks like.
• Finalize health insurance needs. Clients get really nervous about health insurance, Underwood-Kotner said, so make sure they are confident and comfortable here.
• Allocate one or more years of expenses to cash. This is the rule of thumb.
• Continue spring cleaning.
• Review the client’s retirement budget.
• Review dates to turn on protected income sources and execute.
• Review the last five years.

Once clients enter the “passage” phase, Underwood-Kotner said advisors can do several things to stay engaged with clients and get them used to the new normal:

• Help them celebrate retirement by hosting semiannual parties for your other clients who have retired that year.
• Produce a “Happy Retiree” newsletter with ideas for travel and cooking.
• Expose clients to volunteer opportunities; many of them don’t know how to get started.
• Sponsor one to two charities a year so that clients can get involved if they choose to.
• Build a happiness retirement wall.
• Host happiness events to keep them engaged and around their peers.