- Identify what brings you a sense of accomplishment and what your personal goals are for after retirement.
- Financial security is key to a healthy, comfortable retirement.
- Intellectual engagement, staying socially engaged and regular exercise are also important factors.
Death and taxes are the oft-quoted ‘certainties of life’, but with ageing populations in Australia and New Zealand, you could add ‘retirement’ to that list.
You may be excited by the prospect of retirement, or it may fill you with dread. Either way, planning your next steps will help you take control of this life stage to make it satisfying, meaningful and enjoyable.
No matter how far away the prospect – next week, next month or next year – there is clear evidence of the benefit of planning what you will do after leaving full-time work.
Finances in retirement are usually the headline issue, but social engagement and your own sense of identity are equally important. That’s especially so if your identity (“I’m an accountant”) and all your social activities have been closely tied to your full-time job.
It’s useful to approach retirement as a series of transitions. It can be a very flexible combination of work, paid or unpaid, community/family/social engagement, education and play. Retirement certainly isn’t a one-size-fits-all box.
This is a life stage where you can do a little dreaming and set some goals. Be imaginative and consider all kinds of options. But remember, without planning, those goals will remain dreams!
A crucial step in planning for retirement is to look at what brings you a sense of accomplishment and recognise what are your personal strengths. What energises you in life? What goals do you want to achieve in retirement?
Identifying these is a good guide to what matters to you and what gives you purpose. In retirement, you will be able to do more of what gives real meaning and purpose to your life.
Before you transition to retirement
Finance in retirement
Being financially secure is key to achieving a comfortable retirement. A recent future[inc] report commissioned by Chartered Accountants Australia and New Zealand, Population Ageing: Do we understand and accept the challenge, identified four main sources of income in retirement for Australians and New Zealanders:
- compulsory superannuation/KiwiSaver
- age pension/New Zealand Super
- private savings
- part-time earnings.
Most of the 2000 respondents surveyed for the report thought they would need income from sources other than the pension to live comfortably in retirement.
In New Zealand, 48% of couples and 24% of singles believe they could get by on current New Zealand Super levels; only 16% of couples and 8% of singles feel they could live on it comfortably.
In Australia, 41% of couples and 35% of singles feel they could get by on the current age pension levels; only 12% of couples and 12% of singles feel they could live comfortably.
So it’s important to have certainty about your retirement income from all sources, including any proceeds from practice succession. Also be aware of your current and expected expenditure and whether there is a gap in the availability of your income from various sources. Will any gaps delay your decision to retire or change the way you retire?
Health in retirement
The good news is that retirement has been linked to positive lifestyle changes. Being freed from full-time work is an opportunity to improve your health, take up a sport, exercise and work on your fitness, says a 2016 article “Retirement – a transition to a healthier lifestyle?” in the American Journal of Preventive Medicine.
But do you or your partner have existing health issues that could bring forward or delay the timing of your retirement? Do you want the time and good health to climb Kilimanjaro or push your grandchildren on a swing? These are all things you should consider and plan for.
Stay socially engaged
Staying socially engaged is a pillar of ongoing wellbeing. Will stopping full-time work leave a social gap for you that you want to fill with other social activities?
A research meta-analysis published in The Milbank Quarterly, “Supporting well-being in retirement through meaningful social roles”, found that the kinds of social roles you take on matter when it comes to feeling good about yourself.
Those roles that allow intergenerational engagement; have an explicit function in a social group; involve social networking and learning; or voluntary activities that bring a sense of reward all lead to a greater sense of wellbeing.
Keeping your sense of identity after full-time work
The more strongly your identity is tied to your full-time role, the more important it is that you find alternative ways of using your talents in retirement, according to the “Mobilizing resources for well-being” study, published in The Gerontologist.
You may want to explore ways of continuing to use your professional knowledge and expertise by contributing to a not-for-profit (NFP) organisation, or by mentoring someone in your field. Can you identify a NFP or mentees now who might benefit from your experience and support after you have retired?
Intellectual stimulation in retirement
Intellectual engagement and regular exercise are a key to keeping your mind and body healthy. So after you finish full-time work, do you want to retain the same level of intellectual engagement? You might want to stretch yourself by tackling something very different. Do you want to take up playing bridge, learn a language or a musical instrument? Do a degree for pleasure? Or master the cryptic crossword?
Ask yourself, could you start now to engage in activities that stimulate your mind and perhaps your creativity?
Start planning for retirement now
Having a sense of control over your retirement is an important part of getting the most out of it, according to a US study “Extending the integrated model of retirement adjustment” in the Journal of Vocational Behavior. And it might come as a surprise, but planning for your retirement can be enjoyable and exciting.
Think about those things you identified as being energising and meaningful in your life and, ideally, build your plan around them. And be prepared to adjust that plan if you need to.
Committing the plan to writing will make it easier to monitor your progress and make any adjustments. Be clear about what you need to complete each stage and when. The closer the expected retirement date, the SMARTer* (specific, measurable, achievable, realistic and timely) the goals should be.
Think about what support, guidance or assistance you may need to help you achieve your goals. It can be helpful to talk through your plans with someone you trust.
Recognise that it will take some time to adapt to your new life stage, and that there can often be a bit of discomfort around the adjustment. Think about the people who have been most supportive to you in the past. Keep in touch with them.
Like any life change, it won’t all be smooth sailing. But planning, identifying and drawing on the resources you have used in the past to navigate change and set meaningful goals will help you manage this process.
Article by – CATHERINE KENNEDY FCA – manager of member support at CA ANZ.