The opportunities to provide products or services to retirees do not end at the Retirement Inflexion Point™ -- that period when a person is effecting the switch from full employment to retirement.

Life Adjustments
Based on DSG focus group research, a common concern among early-stage retirees is the issue of how they would spend their time once a full-time job was no longer part of their daily routine. In many cases, this life adjustment question was more of a concern to retirees than even their financial issues.

Proposed Stages
The retirement period can be segmented into specific stages, each with its own set of needs and opportunities:

• Transition
• Acclimation
• Retirement Management
• Dependency

As retirees pass through these stages, they are faced with the need to make changes -- financially, emotionally, psychologically, and perhaps physically. Ultimately, this means the need for assistance in the forms of advice, services, and products. Thus, each stage represents a different segment, with different needs and different appropriate strategies for marketing and communications.

Also, as needs change from one stage to another, so too does the marketing opportunity; and those financial services firms who treat retirees as one monolithic segment will have difficulty retaining their business as their retired clients age.

Each of these proposed retirement adjustment stages is further defined below. Each stage represents a segment of the retiree market with specific needs that reflect the typical behavior and concerns occurring during that stage. It should be noted that stages cannot be simply defined by age level since the timing of these stages can vary widely among the retiree population.

1. Transition: the changeover from a savings to an income orientation, from full-time career to retirement, or perhaps a part-time job. In this stage, retirees must determine how to go from saving for retirement to living off of those savings -- their Retirement Inflexion Point™.
2. Acclimation: the early phase of adjusting to post-retirement circumstances, getting comfortable with financial arrangements, establishing a new (final?) location of residence. This stage may include the age 70 ½ distribution decision and finalizing long term care parameters.
3. Retirement Management: actively controlling the financial balance between short-term income optimization vs. the longer-term aspects of retirement, with the financial and physical implications of increasing longevity. This stage may require an investment advisor, a change in investment products, and estate planning. A trust arrangement may also be called for, in preparation for the next stage.
4. Dependency: the latter stages of retirement when age-induced mental and/or physical impairments force a transition from financial and physical independence to dependency on others for managing financial and other matters.

While there are other ways to segment the retiree population, the four proposed here represent major life adjustments during retirement, each with its own set of needs. They will require careful thought about the appropriate products, services, and/or advice required to satisfy these needs.

Indeed, DSG Research has looked at a number of life events that often occur during retirement, often overlapping these transition stages mentioned above. Some examples of such events to be considered include:

• Assisted living or nursing home care is needed for the parents of younger retirees.
• An inheritance is received.
• There is a wish on the part of the retiree to move into a smaller residence, to a different geographical region, or into an assisted living facility or nursing home.
• The retiree or spouse experiences a serious health issue.
• The death of a spouse.

It is generally regarded that these life events will prompt someone to review his or her financial situation during retirement, thereby opening up additional opportunity for providing assistance and solutions.

Throughout all these considerations, there is one certainty: financial services companies, planners, and product designers cannot assume there is a single answer for all retirees. Rather, they will need to identify and analyze segments within the retiree population and provide solutions for their particular needs.

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