When someone says the word ‘retirement,’ do you picture endless rounds of golf? River cruises in Europe? Downsizing and moving to the south coast? While there’s nothing wrong with imagining retirement like this, what it means to retire is changing and looks very different in 2019.
Traditionally, you’d hit your sixties and be encouraged to stop working. You could access your superannuation and from there on out, you’d be financially independent – after all, you’d spent your entire working life squirrelling your contributions away. But, it’s not as simple as this. People are treating retirement differently. Priorities have changed and Australians are living longer. As they say, ‘age is just a number’ and more people are choosing to retire in their own way and on their own terms.
So, is there the right retirement age?
Currently, in Australia, there isn’t a set age to retire, neither are people forced into retirement. By definition, it’s purely down to the individual. However, some choose to retire when they can access their superannuation or when they become eligible for the Age Pension, which is currently 65-and-a-half, with a view to increase to 67 in 2023.
Ultimately, we’re all at different stages in our lives – some right in the thick of careers, some well towards the end, or some not working at all. In any case, retirement is relevant to everyone no matter their age, employment status or financial situation. In our experience, those who are smart with their wealth proactively consider their retirement when putting their financial plans together.
At Talem Wealth, we work with a variety of clients at different life stages. Over the years, we’ve noticed a widening variance on people’s thinking and behaviour when it comes to addressing retirement. Our clients come to us with all sorts of different plans and approaches to their retirement.
For those who are still working
While retirement may seem like a long time away, it’s important to be thinking about what it might look like for you. More often than not, the typical response is, “I don’t need to think about it” or, “I’ve got years before I retire.” There can be a culture of dissociation and lack of interest when it comes to talking about retirement with this particular group. But something to ask yourself is what do you expect from your retirement? How do you see your lifestyle unfolding in your later years? Maybe travelling the world is important or, eventually, you might want to set your family up financially. What is important is that all of this can only be possible upon the financial planning that you do today – relying on just your superannuation will not be enough. It’s here that you can start to look at alternative options to build your wealth. Are there any investment opportunities? Can you be managing your cash flow differently? Consider ways your earnings can be working harder for you.
For those who are close to retirement
If retirement is on the cards now, or at least in the foreseeable future, this period is about preparation and considering all the appropriate options. Check your current situation, then ask yourself, are you ready for something different? Do you want more flexibility in your life? Are you ready to cut back on your work hours? At this point, it’s important to have a strategy that is not only going to get you closer to retirement but will continue to support you into retirement. Changes to the industry, above-average house prices and a significant increase in the cost of living, has forced some retirees’ back to the workforce, so this is the perfect time to be getting your ducks in a row.
For those who are retired
By this point, it’s about making sure you feel comfortable and secure. This doesn’t necessarily mean you have to stop working altogether either. Perhaps there are other things that you want to do with your time. There’s an opportunity for you to fill your time with something that may look and feel like work but not receive an income. There may be a long list of things you have always wanted to do, that you can now start ticking off. Maybe it is the flexibility you seek more so than the indefinite finish from work.
Retire on your own terms and in your own way
No matter what retirement looks like to you, it’s imperative to have a well-considered plan on how to get there. Working with a financial adviser can help you achieve this – whether it’s starting to consider retirement options or wealth management during retirement – we can guide you in the right direction. For us, retirement should be about achieving financial wellbeing, so speak with us today to see how we can help you.