How can you know how much money you’ll need if you haven’t defined your dreams, asks Ian Hutchinson.
How can you know how much money you’ll need if you haven’t defined your dreams, asks Ian Hutchinson.
Less than a third of people actively plan for their retirement, and those that do tend to focus only on the financial aspect. This is odd considering that it is the lifestyle you want that determines how much money you need in retirement! Do you have a clear vision of your dream retirement lifestyle?
Are you happy to spend most of your time during your retirement around the home or visiting family? Or do you want to travel the world?
Lifestyle planning
Lifestyle planning is about being clear on what you want to do now, and having a clear vision for the future. If you know more clearly what you want to do now and in the future, then you’ll be more motivated and emotionally connected to your financial goals.Having focus and clarity in retirement is empowering and reduces the stress and uncertainty of this major life transition. Feeling more in control of your future, you can create a happier and more fulfilling life.
Few people actually stop working during retirement. Whether you are running a part-time business from home, writing your memoirs, volunteering your time to the community or providing childcare to your grandchildren, you are likely to find it necessary to ‘make time’ for that quiet existence you had envisaged retirement would entail.
Lifestyle priorities
It makes sense to be clear on your priorities. I have identified 10 lifestyle priorities, as illustrated in the chart opposite.Health
Regular exercise, healthy food and positive thoughts affect the chemicals in your brain, giving you a sense of well-being. I know a woman who has cancelled having the newspapers delivered to her door and instead takes a morning walk via the paper shop. She enjoys the exercise and, if she walks with her partner or a friend, the conversation. What could you be doing to introduce healthy habits in your life?Financial
Having sufficient money to afford your desired retirement lifestyle and being in control of your finances can greatly reduce the stress associated with retirement.
Draw up a budget and see a financial planner, who can match your desired lifestyle with an appropriate financial strategy.Purposeful work/activities
Retirement doesn’t have to mean stopping work altogether. You might work part-time, and the work itself could take many forms, from babysitting the grandchildren to organising a charity event. Research shows the benefit of having purposeful activities to ‘successful’ retirement, providing a sense of purpose, identity, structure, and meaning. I know a man who combines his excellent communication skills with a lifelong interest in animals through taking dogs to visit patients in hospitals.Love relationship
Research shows that retired couples commonly have greater happiness in their retirement than retired singles. If you don’t have anyone in your life at the moment, it may be worth considering another relationship. If you are in a relationship, it’s likely you’ll be spending more time with your partner in retirement than ever before. I know a couple who have agreed on specific times when they will be together in the home but doing their own thing.
| Example | Priority 1 | Priority 2 | Priority 3 |
| Strategies | Strategies | Strategies | Strategies |
| a) Go Swimming 3 times a week | |||
| b) Walk 2 times a week with friends | |||
| c) Enrol in an 8 week Yoga class |
Family
Family is a high priority for adults generally in Australia, with 75 per cent rating "being able to spend more time with family and friends" as very important to increasing their quality of life. Retirement can be a good opportunity to spend more time with family, although I do know some people who seem to have moved into full-time child rearing in their retirement. As with everything, I think balance is the key.Social
Studies show that social participation in later life promotes physical and psychological health. There are many opportunities for social interaction during retirement. You could look at joining a club, sporting group, have friends over for barbeques or spend weekends away with a group of people. If you’re not sure where to start, you could try contacting your local Probus Club, or requesting some information from the Council on the Ageing.Contribution to society
For many people, giving something back to society is extremely important. We all have some form of experience and wisdom that’s accumulated over our lives that can be of benefit to society. You could start with small things like helping a friend.Hobbies, interests and creativity
Hobbies can provide a great deal of happiness during retirement, providing a challenge, an interest, relaxation, and some fun. For example, having a workshop set up in the garage can provide not only the challenge of creating something new, but can also be a peaceful place of relaxation. You could make a list of interests you have. Are there things you have always wanted to do but have never got around to? If you get stuck you might like to look at the index to the Yellow Pages for more ideas.Intellectual growth and learning
I’ve often heard it said that with your brain, you can "use it or lose it". Learning during retirement can provide purpose, meaning, and helps to maintain intellectual clarity. I know a man who is learning about shares, with a plan to take over management of his share investments using a program on his home computer. You might like to consider doing a course, or joining an organisation that keeps ideas, knowledge and wisdom flowing. I say ‘learn for the sake of learning, and have fun doing it’.Spiritual
As we move through life, our increasing knowledge and experience can lead us to discover new meaning in life and to think more deeply about the world and our purpose here. Taking time to focus on your spirituality can be highly rewarding. Don’t worry; this isn’t necessarily religious. It can simply be a time for personal space, meditation, Tai Chi, or walking on the beach. If you don’t know how to meditate, do a course.Your lifestyle priorities
You are now ready to turn back to page 27 and try this quick exercise to identify your lifestyle priorities. Which of the 10 categories of lifestyle priorities would be the top three in contributing most to your happiness now and in the future? Write them in order of priority at the top of each of the three columns of this worksheet.
When you’ve completed the worksheet, give yourself a score out of 10 based on how happy you are at the moment with each of the three lifestyle priorities that you have selected. By scoring yourself you can now ask yourself the question: "What three things (or strategies) can I do to get my score closer to a 9 or 10 our of 10?"
OK, write down three things (strategies) for improving your score that immediately come to mind. Be as specific as possible and try to include a number in your strategy. For example, instead of writing ‘exercise more’ as a strategy for health, be specific with a number. So you may write something like ‘walk the dog three times a week for 45 minutes each time’.
Retirement is anything but a long road downhill. It can give you a sense of freedom, choice and can be an opportunity for success, personal growth, contribution and achievement. Enjoy it!
Ian Hutchinson, founder of Life by Design
Email: ian@lifebydesign.com.au
Ph (02) 9420 8280
Web www.lifebydesign.com.au
KAYE FALLICK
These articles and many
more, are in the current
(15th edition)
of Your Retirement, Your Life.
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