The 'Rule of Four Futures' in Retirement

Retirement isn’t a competition, as the 'Rule of Four Futures' demonstrates; there's a lot left up to chance. But it may help you prepare for retirement as if it is a tournament — maybe even the biggest one of your life.

To prepare for the 2024 Olympics, Australian boxer Harry Garside deliberately placed himself in 100 uncomfortable situations, from asking strangers for hugs to making oddball fast-food orders. Why? To strengthen his mental toughness so he would be ready for anything.

You don’t need to hug strangers or take punches to prepare for retirement. But financial experts say it helps to think beyond your ideal scenario.

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A report by Edward Jones and Age Wave found that 69% of men and 81% of women in retirement experienced at least one major disruption. The most common included the death of a loved one, health problems or significant financial setbacks.

As Gregory Guenther, co-founder of GRANTvest Financial Group, puts it: “You don’t get to choose the curveballs life throws at you, but you can choose how prepared you’ll be when they come.”

That’s where renowned futurist James Dator’s “Four Futures” framework comes in. Originally designed to explore how societies might evolve, it outlines four types of possible futures. Retirement research suggests that many retirees’ experiences often fall into similar patterns, from the expected and routine to the unpredictable, challenging and transformative.

As a planning tool, it offers a surprisingly practical way to prepare for retirement: Not by predicting the future, but by becoming more resilient to whatever form it might take.

1. The 'Rule of Four Futures' first rule: the expected retirement

Dator’s first future, called “continuation,” reflects stability. The world and your life proceed as planned.

This is the expected retirement: you stop working around your planned age, draw on your savings and Social Security, and enjoy travel, hobbies and family.

And research shows that this is reality for most. According to a recent Fidelity survey, more than 70% of recent retirees say retirement is going as planned.

This kind of retirement generally features a few key ingredients: a reliable withdrawal strategy, manageable expenses and good health. Also, retirees who feel most confident often have multiple sources of predictable income and can rely on their portfolios more for discretionary spending.

Still, continuation isn’t guaranteed. The same Fidelity survey found an equal number of retirees said inflation has eaten into their savings. And health care often catches people off guard, with more than half of those who didn’t plan for medical expenses saying they turned out higher than expected.

“Retirement planning isn’t about creating one perfect version of the future,” says Gregory Furer, CEO and founder of Beratung Advisors. “It’s about building a plan that holds up across many what-ifs.”

2. The feared retirement

This is the scenario where something breaks: your health, your finances or both. A market crash, a disability, a spouse’s death or runaway inflation can derail even the most carefully built plan.

This is what Dator would call a “collapse” future, where expectations unravel and harsh realities set in.

An Allianz Life study suggests most Americans fear running out of money in retirement more than death. The Edward Jones and Age Wave report, however, found that retirees say the most disruptive event is the loss of a spouse or partner, cited by 77% of respondents.

“Many people underestimate how much can change in retirement,” says Guenther. “One client lost their spouse two years in, and we had to quickly pivot their income strategy and reevaluate housing and support.”

Unexpected changes to public programs are another growing fear. The latest EBRI Retirement Confidence Survey found that 60% of workers and 80% of retirees worry that Social Security changes will reduce their benefits. That uncertainty has reportedly led more people to claim early this year.

To prepare, advisors recommend building buffers, such as cash reserves, annuities or long-term care insurance, when appropriate. Melissa Caro, CFP® and founder of My Retirement Network, suggests a bucket strategy: “By having liquid assets or stable income to cover near-term needs, clients can avoid selling investments during a downturn and preserve long-term growth.”

While it’s not fun to dwell on worst-case scenarios, planning for feared futures isn’t pessimism. “It’s not about being negative,” Caro says. “It’s about being prepared. Like an emergency fund, it gives you peace of mind.”

3. The disciplined retirement

Knowing the potential risks, some retirees choose a more cautious approach – living with intention and restraint. That might mean downsizing, relocating to a lower-cost area or prioritizing purpose over consumption.

While most retirees say they’re living the lifestyle they envisioned, EBRI found that nearly half admit to spending less than they could because they’re afraid of running out of money. This behavior aligns with Dator’s “discipline” future of living within limits to avoid worst-case outcomes.

Furer says that many retirees struggle to shift from saving to spending. “What’s harder — and more common — is the emotional and lifestyle evolution that happens after retirement begins. Most clients change their goals at least once.”

Being too cautious, however, can lead to unrealized goals. Research shows some retirees end up with the same or more money than when they started, money that could have been used for life experiences.

That’s why flexibility is key. “Flexibility doesn’t mean being overly conservative,” Furer says. “It means building in buffers like liquidity, diverse income sources and revisiting the plan annually.”

4. The transformed retirement

This is the future you didn’t plan for, and possibly couldn’t have.

Many people don’t expect to get divorced in retirement, yet it’s increasingly common. As of 2019, more than one in three people getting divorced were aged 50 or older. But remarriage is on the rise, too. According to Pew Research, 67% of adults aged 55 to 64 and half of those over 65 who divorce end up remarrying.

Unexpected changes in retirement aren’t always negative. In fact, a survey from the Center for Retirement Research at Boston College found that 43% of retirees were most surprised by how much they enjoyed retirement. Many cited becoming a grandparent, taking a dream vacation, or reconnecting with hobbies or volunteer work.

You might take a second-act job, move across the country or receive a significant inheritance. Life doesn’t always follow the script, and that’s exactly what Dator’s fourth future, “transformation,” is all about.

Caro shares a personal example: “My own mother planned a joyful retirement filled with travel and volunteering, only to be diagnosed with cancer two months after leaving work. Because we built flexibility into her plan, we were able to pivot. We found gratitude in simpler moments. Retirement still had meaning — just a different kind.”

Yogi Berra famously said, “It’s tough to make predictions, especially about the future.” He was right. However, if you build a retirement plan that can survive your worst fears and adapt to life’s surprises, you’re far more likely to enjoy the future you actually get.

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