Using Design Thinking to build your retirement plan

You’ll quickly realize that you are seeing your realm of possibilities much differently

As humans we are hardwired to seek certainty. The financial services industry crudely attempts to satisfy this insatiable desire for certainty by using algorithms that turn retirement planning into nothing more than a numbers game. Unfortunately, the only certainty with this approach is the knowledge that the numbers generated by the algorithm are wrong. We know they are wrong because we can’t predict the future, no matter how many numbers we crunch. To get more than just numbers out of your retirement plan you need to approach retirement like a designer.

The process of Design Thinking takes full advantage of what our brains are particularly good at: holding, contemplating and resolving multiple conflicting ideas simultaneously. These conflicting ideas create tension within our brain, causing it to utilize its neural networking web of inter-connectivity to repetitively attempt to resolve the conflicting issues from millions of different directions and perspectives. Ultimately, it finds a solution that was not previously contemplated.

A critical aspect of Design Thinking is having access to an appropriate modelling system that allows ideas to be tested and outcomes measured. The modelling process helps our brains explore the interconnected ideas we are trying to bring together – in our case, what retirement will look like.

While we are busy considering the lifestyle we want in retirement, the model provides a continual reminder of the overall objectives and connects the threads in the background. For many of us, retirement is about accomplishing the greatest number of desired life outcomes, without the risk of outliving our money.

Design Thinking requires three key mindsets:

  1. Always be inquisitive about what might be possible. If you want to avoid mediocre sameness in your retirement solutions, with no appealing alternatives, one must have the optimism, confidence and willingness to explore and test what might be possible.
  2. Accept that finding and discarding wrong solutions is the fastest way to finding the right solutions. Each wrong solution provides insights into discovering better solutions. Through proper modelling each iterative scenario provides new insights and leads to better scenarios.
  3. Create a planning environment that welcomes collaboration from others. To add an incremental level of creativity to your retirement plan, seek the insights from a broad spectrum of people. Their differing perspectives will challenge your ideas and often reveal new, unconsidered options.

The modelling process assists in effectively bridging the communication/comprehension gap that often acts as a deterrent to collaboration. Having the ability to edit and refine scenarios at the speed of conversation and then assessing the impacts of these revisions in real-time, makes the process particularly engaging.

Those who use Design Thinking to build their retirement plan are not afraid to wade into the complexity of the issues they face. They have found that if you are willing to stay patient and stick with the Design Thinking process, you will be presented with alternatives and directions that previously had not been considered. They no longer settle for the inherent shortcomings of conventional wisdom. In the process of designing their ideal/achievable retirement scenario, they have also established a navigation process to help identify when and what course corrections are required.

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