You've got to be joking…
Retirement planning gets bad press. The consequence is that a majority of 45 to 64-year-old Australians have entered the land of denial when it comes to this issue. And there seems little to get them out of denial when most retirement planning information is full of references to aged care, going grey, becoming dependent, and dying. Clichéd photographs of grey haired couples drinking lattes or walking hand-in-hand on the beach suggest singles don't matter, and happily retired couples just play.
How does this affect you? If you're feeling fit, healthy and happy to work for a few more years at least - can't your retirement planning wait?
It would be a mistake to allow these outdated notions of retirement planning turn you off. There is now sufficient research to prove that those with a clear sense of direction for their later years, and intentions of active social engagement, intergenerational connections, and life-long learning, will be clearly ahead. But these positives don't just fall into your lap the day after you leave full-time work – they need to be created. The good news is that it's not all hard work. When retirement planning becomes life planning it is a challenging, fun and fulfilling task.
Goals for your next life stage
Positive planning is based on the recognition that leaving full-time employment is a great opportunity to enter a new, and very rewarding, life stage. It's all about starting, not stopping. Until now you may have been working, paid or unpaid, to fulfill obligations to other people, or to pay off a mortgage, raise and educate children, put food on the table. Now you are entering a time when it will be your turn to be who or what you've always wanted to be , devoting more time and energy to fulfilling life goals you've always longed to achieve, but have been simply too busy to contemplate. These goals are as individual as you are – some high achievers will have a list of 100 – others will be happy to work away at one particular task, such as organising the family snapshots, or creating a vegetable garden. It's entirely personal.
It's not about the money, yet…
Income streams, superannuation, and tax are all important. But there is no point in putting the cart before the horse. Until you know what you plan to do when you leave work, how can you usefully anticipate what type of income you will require? And until you assess how you really want to spend your time, you won't have a clear idea of a typical week, out of the workforce, and the associated living expenses.
Four steps to get you started
To plan successfully, you will need to:
- clarify your issues and goals
- benchmark your current position
- convert your goals into a plan
- convert this plan into achievable steps
Those used to setting and meeting business deadlines will be familiar with such a program. But it can be much easier to plan objectively when business targets are involved, than when considering personal objectives. The first concern is often, “But I don't really know what I want to do…”.
You're not alone
Not knowing how you might fill 50 hours a week if you cease fulltime work too abruptly can be a major issue. This is why a staged transition to retirement is usually the best strategy, cutting back to three days a week, and then fewer days as time, and income demands, change. But continuing with part-time work may not be an option for everyone who wants it, despite the avowed skills shortage Seeking new directions can also be frightening – some people thrive upon change, others are unsettled by it.
How can you ascertain how you will want to spend your extra time?
First, you need to know yourself. Who are you, where are you at, what sort of roles do you currently play? What's good, bad, or just okay about your existence? Where would you like to be in five years' time? How do you really want to use your energy and time? To balance the different aspects of your life?
Defining your roles
Many of us perform across a range of different roles on a daily, weekly and monthly basis. When we are working fulltime it is easy to feel as though we are just skating across the top of these obligations, never really performing satisfactorily in a variety of areas. Now is an ideal time to review how you are performing, and how, if you had more spare time, you might change your emphasis to achieve a higher sense of satisfaction.
Your goals in retirement
Next list 10 goals you would really like to achieve during the first five years as you transition into retirement. They might include enhanced personal relationships, improved health, intellectual pursuits, sport and fitness endeavours, and business or career ambitions. They might be extremely ambitious (start a new CV franchise business) modest (tidy desk) or in-between (complete a Workplace training course). It doesn't really matter. What matters is to find 10 things which thrill your soul and commit them to paper. Then prioritise them from most important to least.
Remember that if your wish list includes activities promoting physical health, mental wellbeing and stimulation, community involvement, spiritual exploration, and satisfying work, you will ensure an ongoing sense of engagement.
Time to get SMART
Applying the SMART test to these goals is your next step. Each goal needs to become:
Goals which conform to these five points usually can and will be reached. Those which don't are likely to remain dreams, and not a reality.
Click here for a goal planning table to list your main goal, and apply the ‘smart' test to it.
For example, your main goal may be to start a CV franchise business. Simply listed like this, is an example of a 'non-smart' goal. It is not specific, measurable, nor does it have a deadline. To covert this into something more attainable, you could make it specific in terms of size of business, number of employees (even if only one), expected hours of work per week and location of business. The measurable aspect could be the dollar turnover, and the deadline could be within 18 months. To help with more specific planning of your main goal, try thinking about it as a series of small steps. This is based on a quote by Vincent Van Gogh, Great things are not done by impulse but by a series of small things brought together. Breaking your major goal down into such a series of steps will achieve two main outcomes. Firstly it will allow you to organise your information gathering, seeing your potential strengths and possible weaknesses in achieving you goal. But perhaps more importantly, when organised into 'bite-sized' chunks, it will be encouraging to see that the first step is just a phone call, a conversation, a visit to a website, and easily done. Once this step has been achieved, you will have made a start. And nothing will feel more powerful than that!
When your goal has been tweaked to satisfy the 'smart' criteria, then you will, with the other life planning detail you have recorded, be able to predict with a degree of accuracy accurately what a regular weekly timetable in your (semi?) retirement might look like. Fill in the table below to reflect the different activities you have listed, bearing in mind the balance of work, fitness, mental, relationship and spiritual activities which will give the best life balance. Don't forget some timeout, to recharge the battery.
Director of CEPAR, John Piggott, shares his point of view on retirement.
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Noel Whittaker explains how your transition to retirement strategy might change.
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