By Lynette Murray
In wealthier countries such as Australia, 50% of the people born in 2000 will get to celebrate their 100th birthday. If you plan to retire at 60 or even 70, that’s a lot of gardening and golf!
You might know people in their 60s, 70s and 80s who are still working, volunteering or creating in ways that bring them fulfilment and contribute to society. Unfortunately, as we live longer there is a good chance we will outlive our finances without proper planning. Regardless of your age, it’s never too early to start planning and now is the time to start thinking about what you want a planned retirement to look like; here are 4 things to think about.
- Can you fund a 30-year holiday?
One of the implications of living longer is how do you fund a longer retirement? Retirement will probably be more expensive than you think. The cost of living is set to go up and the purchasing power of your savings will be affected by inflation. The other thing that people don’t think about when planning their financial future is that one half of a couple is likely to outlive the other by a substantial number of years. Joint life expectancy needs to be factored into your financial planning. Have you considered using the family home to assist with addressing some of these financial challenges? This could mean a reverse mortgage, downsizing, renting or building on a granny flat to your children’s properties.
- How old will you feel?
Your chronological age is not a good indicator of how healthy you are or how mentally alert and energetic you feel. In fact, staying active in the workforce for longer can be beneficial to your health. While you might have different skills from a 30-year old, it doesn’t mean you can’t be as productive as one.
- Does a linear view of life work for you?
It used to be a case of study, work and retire before a relatively early death. However, retirement is a social construct, there’s nothing to say you can’t have multiple careers with periods of re-skilling, mini-retirements or gap years throughout your life. Have you thought about what works for you, rather than what the social norm is?
- How could you think differently about work?
Maybe the first 20 or so years of your working life were spent doing a job you tolerated rather than loved? With potentially another 20 years of work still ahead of you, you have time for a completely different career that is fulfilling as well as financially rewarding. Alternatively, you may enjoy your career but have found your priorities have changed as you’ve got older. You may want more flexibility to travel or take care of ageing parents. Maybe you’ve always dreamed of starting your own business. Could any of these options be part of your transition to retirement plan?
A lifestyle by design rather than default means you get to create a future that works for you.
Lynette Murray is a Platinum Adviser and Managing Director of ActonAdviceGroup. Lynette has 20 client reviews and asn average client rating of 95%