Let me start by stating the obvious. Life, at any stage, should never be defined by money. Despite what the Beatles sang “Give me money – that’s all I want,” it is NOT more important than everything else. Trouble is, if you Google “retirement planning,” financial planning is about all you get. I looked through the first four pages of results and despite some of the headings that talk about things like “the most important things you need to know to retire”, the stories were still about money! It seems that the world has tricked us into believing that, if we get our finances right in retirement, the rest will fall into place automatically. The truth is – it won’t! Retirement planning requires consideration of many more important things than finances. In fact, things like avoiding a grey divorce, the collapse of your health and friendship network, and many other issues can make any retirement financial problems seem insignificant.
Your retirement years can be the best years of your life, but retirement also has the potential to be the worst time of your life. Whether it’s good or bad can depend on how well you prepare. So how do you begin to make plans for retirement?
Step 1. Choose what’s important to you. Imagine you have just retired, and your doctor calls you in and says you have only three good years to live. How would you handle that news? What things would you want to do or achieve? I think we all ought to make a list now of how you would live for those three years before we get to that point. I imagine there are many thing you would do with your family and friends. There may be some broken relationships that you would like to restore. There may be places to go and things you have always wanted to do. So what would be on your bucket list if you had just three years to live? I guarantee it won’t include putting more money in to your superannuation scheme!
This list should form the basis of the first few years of your retirement. Give yourself a few months to get over work and then get on with the list. If you are like me, your estimate of how long they will take to complete, will probably be wrong and it may take you longer than three years, but at least you will have some sort of plan of what to do. If you can’t think of anything to put on your list, have a look at this blog.
Step 2. Get your documents sorted out. You should…
- Prepare or revise your will and choose an executor. Those who know about these things say you should review your will every 3 to 5 years and whenever your life takes a dramatic turn. You should also make sure your executor knows where to find you will. See this blog.
- Organise an enduring power of attorney and an advance health directive if you haven’t already. You must do this before any form of memory loss sets in. In Australia, contact your local community legal centre for some free advice and cheap options.
- Review any life insurance schemes. CentreLink in Australia considers the withdrawal value of life insurance as an asset but not funeral insurance. It is worth pondering whether you need more insurance in the fourth quarter of your life than what your funeral will cost.
- Have a thorough health check & review your health insurance. Look for hereditary health issues and of course prostate issues. Prostate cancer is the largest cancer effecting men in Australia. So get a PSA check NOW.
Step 3. Plan ways to improve your marriage. One of the greatest issues facing Australians and Americans (maybe others) is the rate of divorce for people age 55+. As I said in this blog, in Australia, where the overall divorce rate has decreased in the last 20 years, it has risen significantly among people of retirement age. If you don’t want to be part of that statistic, plan ways to improve your marriage and begin today. Whether you like it or not, you will spend a whole lot more time with your spouse when you retire, and so you face a choice – to make that time the best it can be, or slide into a lonely life. If you need some help working out where to begin see this blog.
Step 4. Work out ways to replace your work hours with some USEFUL activity. For the first couple of years of my retirement, I did University courses about subjects I was interested in. I did a course on developing software, the Jewish view of the Old Testament, the Dead Sea scrolls and a few others. So make yourself a curiosity list – what things are you curious about? You probably aren’t interested in any of the things I am, but you may be interested in other things so go to Edx.org and choose something that takes your fancy. There are a huge number of free courses you can choose from.
Step 5. Work out how to give back to the world. It may mean finding someone you can help – like that elderly neighbour who can’t mow their lawn anymore or like that kids program that needs some assistance setting up each week or the local church who need a handyman to fix things for them or others in the community. It may mean volunteering some time in some organisation. You can find out where you can volunteer in Australia here.
Volunteering won’t work for everybody because in 2010, the volunteer rates for adults by age group were:
Overall – 36.2% of the adult population.
- 45-54 years– 44%
- 55-64 years – 43%
- 65+ years – 31%
So only about ⅓ of people of retirement age find some useful way of volunteering and, in fact, that’s less than those who are not retired! But if you can find a place to volunteer, then just do it!
Many blokes think they might get part time work in their retirement wherever they can find it. Be careful because the simple truth is: successful part-time work (and volunteering) requires the right mindset, a little creativity, and of course, a good plan. Retirees need to approach the job market with realistic expectations and goals. Too often, people wrongly assume that they’ll be able to work the perfect schedule and set their own wage. That’s never been my experience and is unlikely to become so, just because I retired. So set realistic expectations for your role with the organisation. That means asking about an exit strategy before you start, in case you feel uncomfortable, it doesn’t match your skills, causes a physical challenge, or doesn’t meet other expectations.
Step 6. Work out a plan to replace your current social network. You social network often collapses when you retire because the people you have socialised with over your working life will probably keep working. So rebuilding a network in your 60’s or 70’s can be tricky but things like attending a gym class, the mens shed and church (or all of these) can be a great source of social connections but may also be a source of frustration. So stick at your plan for a while to give it a real go and have a backup plan. The truth is, you need people more than you realise and unless you get lucky, most people aren’t just waiting for you to arrive in their life. You may have to put in considerable effort in finding people you can relate to. You will live longer than the previous generation and if you get this right you will live even longer! The statistics tell us those who are socially isolated, have a much shorter life span than those who are well connected socially. So you should prepare well for that long life. See this blog to help you.
Step 7. Plan to travel with purpose. Don’t just go somewhere. Go somewhere where you can do something significant to you. If you have wondered about why Israel is in the news so much – go and find out. If you have wondered why some African countries have issues go and find out but go with a purpose like David did. If you have read about the adventures of St Paul for years, go to the places he went and discover why he wrote some of the things he did.
Make sure there is a reason to go someplace AND do some research before you get there. There’s nothing worse than getting home and finding out that you missed something significant. We recently travelled to Zion National Park in the USA and when we got home we discovered there is a slot canyon there that I’d love to have seen. If you don’t know what a slot canyon is, Google it. They can be fantastic places to see when there is no rain around. See this blog.
Step 8. Plan some healthy habits. I actually joined a Gym a few years before I retired to get into the habit of getting fit and staying that way. I’m so glad I did. Being fit sure beats not being fit. Of course you don’t have to join a gym, but you do have to make plans and carry them out. So you could work out which bush walks are around you and go and do them or figure out how far two kilometres is from your home (or 5 or 10) and plan to walk that distance two or three times each week. Heres a checklist for your health in Microsoft word format. Let me know if you can’t read it and I’ll email you a plain text one. Retirement health checklist
Step 9. Work out what your purpose in life is. This is vital at any age but becomes crucial when you retire because you have to restructure your life and your work identity evaporates. If you haven’t read “The Purpose Driven Life” by Rick Warren, get it and read it today. It is the best selling book in the world behind the bible. You desperately need to work out who you are and who God is. This blog might help you.
Step 10. Pay some attention to finances. Just don’t spend all your time trying to work it out! If you are nearing retirement, them most of what will happen is already in place. Have a look at this blog for more help and stop worrying about this aspect of retirement.
Step 11. Stay connected to this website because we write stories each week to help you navigate the best phase of your life. We don’t try and sell you anything. We don’t even ask for your email address. So come back each week and find out what we have in store for you.