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When You Say: "I Wish I Knew—If Only I Had a Clue What I Wanted to Do for Retirement."
To plan for life after work, you need two things—a spreadsheet and a dream. Because you can't estimate the cost of retirement until you know what you will be doing, financial planner Paula Boyer Kennedy tells her clients to design their ideal week in retirement. She doesn't let them off the hook with the usual "play some golf, visit the grandchildren" generalities. She wants a detailed plan, with every morning, afternoon, and night filled in for seven days straight. "Most people can't get past lunch on Wednesday," says Kennedy, who is coauthor, with Stacey Tisdale, of The True Cost of Happiness: The Real Story Behind Managing Your Money. To help people develop a road map for their retirement, Tisdale and Kennedy lead them through questions developed by George Kinder, a financial planner who is credited with starting the "life planning" movement:

• If you had all the money you'd ever need, how would you spend your time?
  
• If you had only five years to live, how would you live your life?
  
• If you found out your life would be over tomorrow, what would your regrets be?

As simple as the questions sound, Kennedy and Tisdale say, people are shocked by their own answers. They are so caught up in their daily lives that they've never focused on long-term priorities. The exercise helps them discover what's important to them and what they really want from later life, paving the way to the next step. "Once they have a clear idea of where they want to go," says Kennedy, then the spreadsheets come into play. By tallying the actual cost of their plans, they not only know how much to save but can ask themselves, as Kennedy says, "Is the dream worth the price?" She recalls one client, a New York City woman in her early 60s, who said she wanted to continue to live in Manhattan when she was done with her career. "Looking at her finances, she realized that she could retire tomorrow if she moved back to her native Mexico and live very nicely there," Kennedy says. "But if she stayed in Manhattan, she could probably never retire." The choice was easy, and she headed south.

For clients who are determined to make their dream happen, Kennedy suggests they give themselves frequent reminders; in her experience, that's what makes people more likely to meet their goals. "You want to go to Australia? I want pictures of Australia in your house," Kennedy says. "I want a picture of that beach in your wallet where your credit card is."
 
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