You’ll have more time on your hands, so it’s essential to consider what you want to devote that time to. A study found that 97 per cent of retirees with a strong sense of purpose were generally happy and satisfied in retirement. Think about what gives your life meaning and purpose, and weave those elements into your plans.
If you are a couple, it’s critical to ensure that you are both on the same page about what retirement means. This calls for open and honest communication about what you both want and may also involve some degree of compromise as you work together to devise a plan that meets both of your needs.
There are many practical considerations once you have started to plan how you’ll spend your time.
Here are a few things you may wish to consider:
- Where do you want to live? Do you want to be close to a city, or are you interested in living in a more coastal or rural area? Do you want to travel or live overseas for an extended period?
- What infrastructure and health services might you need as you age? Are these services adequate and accessible in the area you are considering living in?
- What hobbies and activities do you want to be involved in? Do you need to start developing networks for those activities in advance?
- Who do you want to spend time with? If you have children and grandchildren, consider what role you would like to play in their lives upon retirement.
- Do you wish to assist your children financially?
Of course, with all this planning, it’s also important to acknowledge that the best-laid plans can go astray due to factors beyond our control. It’s essential to keep an open mind and be adaptable.
A strategy that I have found to be successful when planning for retirement is to look backwards. Many people plan their retirement with a forward-thinking approach, such as, what will I be doing when I am 60? What will I be doing when I am 65? I find many clients struggle when we use this approach. A more successful strategy will be working backwards. That is, what will I be doing when I am 80? Will I be retired? Will I be still living in my current home? What activities will I undertake? Then ask these same questions for age 70 and again for age 65 and 60. If there are things you want to do in your life, you can slot them into these age brackets. For example, if you plan to undertake travel involving a lot of sightseeing, it would be more appropriate to do these types of bucket list items in your 60s rather than 70s.
The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.