Just over half of Australian pre-retirees have started a formal retirement plan. This means that a sizeable proportion of people aged 45 to 64 have not yet started retirement planning and might be in denial about this important life stage. A deep lack of trust in financial planners could be one reason and a hope that ‘she’ll be right’ could be another.
With most retirement planning information full of references to a life of increasing dependence, as well as clichéd photographs of grey-haired couples walking hand-in-hand on the beach, it’s little wonder so many are disengaged in this process.
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?
No, it can’t.
It would be a mistake to allow these out-dated notions of retirement planning to turn you off. Research shows that those who plan early and include social interaction, intergenerational connections and life-long learning will enjoy productive later lives. But this won’t just happen. The good news is that retirement planning is a challenging, fun and fulfilling task. And it’s not hard work.
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 rewarding life stage. It's all about starting, not stopping. Until now, you may have been working, paid or unpaid, to fulfil obligations to other people, or to pay off a mortgage, raise and educate children, and put food on the table. Now it’s your turn to tackle those fulfilling life goals you've always longed to achieve, but have simply been too busy to contemplate.
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 successfully 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 the associated living expenses. To plan successfully, you will need to:
• clarify your roles, responsibilities and goals
• benchmark your current position
• convert your goals into a plan
• convert this plan into achievable steps.
You're not alone
Not knowing how you might fill 50 hours a week if you cease full-time work too abruptly can be a major issue. This is why a staged transition to retirement is usually the best strategy, such as 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 on change, while others find it unsettling.
So, how do you want to spend your extra time?
First, you need to know yourself. So take time to ask yourself what sort of roles you currently fill. What's good, bad, or just okay about your existence? Where would you prefer to be in five years' time? And, if you had more spare time, how might you change your emphasis to achieve a higher sense of satisfaction?
Your goals in retirement
Next, list 10 goals you really want 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 franchise business), or modest (tidy desk), or in-between (complete a workplace training course). It doesn't really matter. What matters is to find 10 things that will thrill your soul while ensuring your ongoing social connection. Then commit these goals to paper, prioritising them from most to least important.
Time to get SMART
Applying the SMART test to these goals is your next step. Each goal needs to be:
Goals that conform to these five points are usually reached. Those that don't are likely to remain dreams rather than reality.
When your goals satisfy the SMART criteria, then alongside the other life-planning details you have recorded, you will be able to predict with a degree of accuracy what a regular weekly timetable in your retirement might look like. Fill in a weekly plan to reflect the different activities you have listed, bearing in mind the balance of work, fitness, mental, relationship and spiritual activities that will give you the best life balance. Don't forget some timeout, to recharge the battery.
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