What is retirement?
Have you ever tried “googling” retirement planning? Well, I just did and guess what? There were 319,000,000 results!
Before you get overwhelmed by the sheer amount of results, It’s worth noting that they all cover the same material, just in many different variations, and are focused on money-centred topics about accumulating wealth in the period of time up to and during retirement. Now I know what you thinking; it can’t be that straightforward. Surely there must be more to retirement planning than just money?
Now that I’ve got you thinking about money, I want you to think about something else: do you want retirement to be the best period of your life thus far or for it just to be averagely static as you spend the rest of your days watching the share market and the 6 o’clock news? Well as you’ve probably guessed already, Google’s search results only speak to the latter.
Now, I want you to think about the last time you went on a big adventure. What planning did you complete before leaving? You probably checked out the best flights, where to stay when you landed, tour companies, hotels, different things you wanted to see. Read reviews on the internet and perhaps even spoke to your friends about their experiences just to make sure that your experience would be as good as it could be.
Well, retirement planning is similar to the above by the fact that it should be seen as a journey and not a destination. That’s right. Despite the mountains of online information saying it’s all about having enough money to reach the final destination, you should have the freedom to chop and change and choose dynamic happiness. It is also pivotal to remember that because it’s a journey, one should prepare in advance to ensure it is a successful one.
Think of retirement planning like planning for a dream holiday – one that doesn’t end that is! Unfortunately, in my experience over many years as an accountant, estate planning consultant, and now financial planner, I’ve found most people spend more time planning for a short-term holiday rather than for a happy retirement.
We all want to spend retirement doing more of the things that we may not have had the time to do whilst working, like travel, community involvement, and spending more quality time with family. We also all want to stay mentally and physically healthy for as long as possible in order to get the most out of our last decades and be in a position to leave a legacy behind for future generations.
In addition to leaving a lasting legacy, many of us may also wish to explore passions we had to put off during the course of our life thus far, a period where the bills, school fees, and providing a good quality of life for our growing families came first. Have you begun to think about how you’re going to make sure you meet your retirement goals?
As we near the “mythical retirement age,” in order to make our goals possible, we typically approach and seek advice from our accountant or investigate a myriad of advice available in books, social media, and google searches. Many of us might even make an appointment to see a financial planner and commence a “retirement plan” based on our “number” for retirement after one or two meetings.
Unfortunately, in order to ensure we commence retirement planning as fast as possible, many of us tend to solely focus on technical and money topics, such as how much you will need to retire, without giving enough thought to what you will do when you retire and how to prepare mentally, emotionally, and physically for retirement.
As a result of the uncertainty of what we want from retirement, how much it will cost, and when to commence, we might stay working for longer and delay retirement for as long as possible, but is this what you want? To prolong working life and miss out on opportunities to make changes and pursue new passions?
Or would you rather go the other route and retire hastily just because you are financially able to on the best guess? Fair warning though: this latter route is known to lead its travelers to hate retirement and wish they just made the best of their situation and carried on working!
If you’re one of those who wished they’d carried on working or poorly planned for retirement, let’s face it – most of us will fall into one of those two groups – then you’ll probably turn into a hobby machine. What do I mean by this exactly? Well, I mean that you will begin to engage in a multitude of activities in order to keep busy and ward off boredom. The problem with this is that many of these activities are costly and will quickly take a huge chunk of our retirement savings.
On the other hand, if you’re someone who has been counting down the days to retirement just because you can’t wait to pick up a few hobbies you haven’t previously had time for, have you asked yourself if you’ll be physically able to engage in these hobbies? How can you be sure? The answer is that you can’t.
It’s clear that all the above scenarios lead to a retirement that is disappointing and lacks purpose. It is worth noting here that a disappointing retirement typically leads to a rapid decline in physical and mental health, either that or it fast tracks the aging process!
Don’t worry though, as long as you take the time now to reconsider what retirement means to you and the steps required to plan for your personalised and ideal retirement, your retirement need not follow the suit of the all-to-common scenarios above.
It is time to think of retirement as not a destination or endpoint, but as a journey or a transition that requires careful planning just like all major life transitions require you to make sure you are prepared well in advance so there are no surprises or disappointments.
This is a more “human” approach each of us needs to take towards retirement planning, an approach where we consider not only the technical tax and financial strategies required to make sure we can fund our retirement but also how to plan for the personal and “real life” issues for that we will face and so that we can make this transition a period of time that you look forward to.
This new approach to retirement planning also provides each of us with an opportunity to think about our current financial well-being and consider whether we are using our money to enjoy our life in the present. That way, we do not have to wait until we have retired to enjoy life and pursue passions and opportunities that may never happen. In short, there’s no time like the present, especially when tomorrow is never guaranteed.
Have you ever tried to picture how long you’d be retired? Well, you might need to alter that picture a bit. The fact is, we are now living longer and healthier lives and our retirement could extend to 30 (sometimes even 50) years after we finish working. So, it could be a mistake to retire too soon without considering what other options there are.
Despite our increased wealth and access to excellent medical care, we are not necessarily healthier. Mental health issues, chronic disease, and dementia are on the rise. A retirement plan should also consider how you can maintain your physical and mental wellbeing.
What we need is retirement advice that encompasses our real life and an adviser who has empathy and an understanding of all the components that contribute to your long-term wellbeing, both the physical, mental and psychological, and how they relate with each other.
Retirement is a Journey
It’s clear from the above paragraphs that what we all really want is to stay mentally and physically healthy and happy for as long as possible, without the need to ever worry about money ever again. But to get there, we are often drawn to money-centred retirement planning that has its focus on technical and transactional strategies with very little consideration of all the factors that contribute to our long-term happiness and wellbeing.
We need to consider retirement as a journey and not a destination, taking a human approach and find out what we need to prepare for the journey that may involve many twists and turns and bumps along the way.
We can then start to plan for transition into retirement, by taking the time to consider what passions we would like to pursue now and later in life. This requires utilising more than a spreadsheet and retirement calculator!
We need a new approach to retirement planning that is not robotic nor compliance-driven but is rather based on our “real life” goals and takes into consideration the technical and also emotional and human considerations necessary for us to enjoy the retirement journey, prepare for forks in the road and help us to live a long and happy life.
Retirement Stepping Stones
The first step in commencing to view retirement as a journey and not a destination, is to review your financial wellbeing and find out how effectively you are using your money to enjoy life today and not wait for another day as we do not know when that day may come.
We have a free Return On Quiz Life you can take to see how effectively you are using your money to live your best life now and where the gaps are so that you can start to make changes to get more out of life. Click on the link below to obtain your free report and make a start on planning your retirement journey.
General Advice Warning: Any advice on this site is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making any decisions.