Most people are so caught up in the day-to-day of working that retirement can feel as if it is thrust upon them rather than being a choice. But with some forethought you can transition into your new lifestyle over a number of years – perhaps 10 or 15 years. I call these bonus years.
There are two parts to retirement – an emotional component and a financial one. When you can get the two of them lining up, that’s often when people are ready. I see clients who are talking about retirement and then perhaps a life event occurs which forces them to retire. This can be hard because you need to be emotionally ready to pull up stumps. It’s not something that’s easily done and it takes some time.
I recall one couple I helped transitioned into retirement successfully. The husband was working part-time and they bought a luxury caravan and started making plans around where they were going to live. They decided to downsize and move into a retirement village – and for them that was the right thing to do. They loved the caravan lifestyle and really enjoyed the feeling of surrounding themselves with people they liked at the retirement village. They’ve had a fantastic retirement to date.
I remember talking to them before they transitioned into retirement and they were surprised to find out they were entitled to some Centrelink payments to augment what they were getting from their own portfolio. This has put them on a similar financial footing, if not maybe even a little better, than they were during their working life. The overwhelming emotion from them was joy in the realisation that they could afford to retire and do it comfortably.
The signs that you’re ready to retire
There are a range of signs that might indicate you’re ready to retire. For some, the barometer is just a birthday. You may have turned 60, or 65, or whatever the age may be, and you feel that you need to retire. But everyone’s got a different view on what that ultimate retirement looks like and when it will happen.
For others it may be entirely financial. You may have accumulated a capital amount that is able to generate the type of retirement income that you need. But you may not realise that you’ve reached this point, so you continue to build wealth and overshoot what you need by quite a margin – being told that you actually reached your retirement goal years ago can produce a range of emotions. You may feel frustrated or angry that you didn’t realise sooner, but once those feelings subside, most people feel happy that they’re now in a position to live the life they really want to.
Once you reach this stage you don’t need to work any more – you’re turning up because you want to not because you need to. And that’s very empowering – understanding that all the years from now on are bonus years and it’s all icing on the cake.
To get you to that point more quickly, the best thing you can do is assess where you are right now, where you really need to be in the future and how long that’s going to take. From there we can help you put together some strategies around what’s possible, taking into consideration all the innovative products that are available to help turbocharge your retirement and bring it forward so you can also have bonus years.
Jason King is an Executive Advisor at Viridian Advisory
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