Finding the right avocation is no less important than selecting the right vocation, Gnuse says. For more retirees, he adds, recreation -- simply having fun -- isn't enough. Workaholics may have a particularly difficult time finding their way. Asks Gnuse: "If you haven't been doing other things, do you really like other things?"

Individuals who draw a blank when they try to envision themselves as retirees may benefit from a systematic approach to retirement planning of the sort advocated by McLean, Va., financial planner Frederick McNair. He tells his clients to break their retirement years into three segments:

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  • The active years. This phase is typified by "very active behavior," McNair says. "Travel, the development of hobbies -- things you were constrained from doing before. These are the opportunities that were deferred."
  • The legacy years. In the following period, retirees tend to be less self-indulgent and more concerned with legacy building. It is a time of "giving service to others," whether the community at large or members of one's family -- the grandchildren, say. It's also in this second phase that plans are made, logistics arranged and assets allocated for the third and final stage.
  • The final years. This is when, frankly, life's endgame is played out.

The money needs to last a long time

A person who retires at 50 today probably should assume a retirement lasting anywhere from 33 to 45 years, McNair says.

This gets to the issue of longevity and, even more important, morbidity, the natural tendency of health to decline as people age. A well-planned retirement recognizes not just how long a person might live, but that his or her final years very well could be characterized by ill health requiring nursing care or hospitalization.

It is difficult, but necessary, McNair says, for a 50-year-old contemplating retirement to "conceptually grasp the potential for health to decline and for finances to be depleted."

More than just recognizing the three segments, the planner has his clients create "wish lists" detailing the most favored lifestyles and circumstances for each period. In turn, the lists help determine the financial agenda, McNair says.

After identifying the desired retirement lifestyle -- and gauging, as accurately as possible, retirement's likely duration -- it's critical that sufficient assets be amassed to pay for it. A realistic cost assessment is a necessary first step, but there's evidence that most Americans defer such calculations and then aren't very realistic when they finally get around to them.

When the Employee Benefit Research Institute surveyed U.S. workers on retirement issues in early 2002, it found that only 32% had attempted to calculate how much they would need to save for retirement. Still, 70% expressed confidence that they would have enough.

But do pre-retirees really know how much they'll need? Only 17% of the workers surveyed anticipated needing 80% or more of pre-retirement income during retirement. The rest said they could make do with less than that, and more than 40% reckoned they could get by on less than 60% of pre-retirement earnings.