Experts assembled for a retirement-themed webcast hosted by the American Institute of CPAs (AICPA) and 360 Degrees of Financial Literacy covered a range of topics, but some of the most interesting points of the discussion actually had little to do with specific investment products or 401(k) account withdrawal strategies.

As observed by Michael Goodman, president of Wealthstream Advisors and an active member of the AICPA, the most challenging part of retirement planning is traditionally thought of as being purely financial. Facing a 20- or even 30-year retirement, few of us have saved what we will eventually need. And with the prospect of hundreds of thousands of dollars in costs just for end-of-life health care, it seems more challenging than ever to amass enough money during one’s working years to make retirement possible, or possibly enjoyable.

While Goodman agreed the basic financial realities of retirement planning are tough, this point of view fails to acknowledge the personal side of retirement, which can be every bit as daunting as the financial factors.

“We all sort of envision retirement in the same way that we envision winning the lottery,” Goodman explained. “We all think it’s automatically going to be a fulfilling time in our lives. Everyone talks about retirement this way, but very few people have actually sat down and thought through what it will be like.”

Coming to terms with the non-financial side of retirement means answering questions such as, where am I going to live? What am I going to do every day when I wake up and don’t have to go to work? How will I care of myself and my loved ones as I age?

“The big question to ask, of course, is what will the purpose of your retirement be?” Goodman adds. “How am I going to keep myself happy? Coming up with answers to these questions is just about as important for a given retiree as setting an appropriate asset allocation.”

Lori Luck, an AICPA member and adviser at CLS Advisors, explained that answering these personal questions about life in retirement will actually help make the financial side much easier. This is because knowing what we want to achieve in retirement gives us a better sense of how much money we’ll need, and how we should proceed in terms of investment risk taking and savings levels.

NEXT: Envisioning life after work

Thinking ahead to the more granular life experience faced in retirement also helps people identify with their future selves, potentially injecting a greater sense of urgency and personal responsibility into the retirement planning effort.

“It sounds like a simple question, but what will a real day in retirement look like and feel like?” Luck asked. “The classic example we always hear is that people want to travel more when they retire, and that this will make them happy. But even if you say you want to travel more, that’s probably only going to be a couple weeks or a month out of the year. What else will you be doing with your time? Retirement often frightens people when they haven’t thought all this out in advance.”

David Stolz, an AICPA member with the advisory firm Stolz & Associates, said he commonly comes across clients who show a commendable focus on the investment side of retirement planning, but they don’t have any answers when it comes to how they would like to spend the money or organize the latter chapters of life.  

“We have a lot of clients who from a financial standpoint are doing very well in the retirement savings effort, but they have no vision at all about what they want to do with their money,” Stolz said. “I always have to say to them, the 401(k) account is not the end—it’s the means to the end.”

Stolz noted that many of the most successful savers are also the most reluctant to make a clean break with the workforce at age 62 or 65. They are dedicated, lifelong workers who have not formed a picture of what life could or should be like after work.

“With this group, we are starting to actively encourage people to think about a second career—it gives you valuable financial flexibility and, to be frank, it keeps you young. Volunteering or starting new hobbies are other options,” Stolz concluded. “Clients must realize it’s simply not a given that they will have structure and meaning in their retirement lifestyle. You have to build these things for yourself.”

All three panelists concluded that it’s very important for workers to start thinking about these things early in their careers.

“The planning process is much more fun and enjoyable when you’re being proactive and getting way out ahead of all these questions,” Stolz said. “Age 60 is not the time to start thinking about these things.”