The first year of retirement is one of transition in which you will need to adjust to major changes that can bring big rewards.
Some of the changes may include preparing mentally for the shift to not working full-time, adjusting to not getting a regular salary, ensuring your money can last for about 30 years and keeping your mind and body active.
Researcher Professor Robert Atchley identified a number of ways people react to leaving work permanently and split the period immediately after paid employment into three paths:
- the "honeymoon" path, for people who dive into many of the fun activities they did not have time for previously, especially travel
- the "immediate retirement routine" path, which covers people who had full and active schedules outside their employment that flow into busy lives soon after retirement
- the "rest and relaxation" path, taken by people who choose to do very little in their early retirement after very busy careers with limited time to themselves.
What to consider
The phase before actual retirement, Professor Atchley says, usually involves disengagement from the workplace and planning for what lies ahead.
If possible, you should use this period to transition into retirement by reducing your working hours or by changing your workload over time.
You should also determine what sort of retirement you want, using the three paths as a guide, and try to plan ahead for your lifestyle adjustment during the first year of transition.
If you know what you want, you will be able to take stock of your finances and take advantage of final opportunities to boost your superannuation if there are gaps in your savings plans. Remember, your retirement funds may need to last 30 years.
Make your life satisfying
A study by the Australian Institute of Family Studies shows there is little change in life satisfaction for both men and women in the year immediately following retirement as they adjust to their new circumstances but thereafter, it improves for both sexes.
Once you have ensured that your savings are on track for retirement, you should start thinking about how you will handle the loss of the worker role and what you can do to improve your life satisfaction.
Will you be one of the "honeymoon" phasers, or will you fall into an "immediate retirement routine"?
It may help to try new things before you retire to decide if they will be right for you, such as hiring a caravan for a short jaunt before buying one for a big trip. If you are considering a sea change or tree change, rent in the area you fancy before making the final leap.
Be fit and healthy
Recent research suggests you need to be fit to retire to age well. Try getting into an exercise routine before you retire that you will be willing to continue when work no longer dominates your life.
The health benefits of regular exercise cannot be overstated as it keeps you mentally fit and helps you ward off disease and disability, even if you start late in life.
And try to do more than just exercise, such as being careful with your diet, as it will increase your health and wellbeing.
We're here to help
Now might be a good time to review your finances and boost your super. If you would like help with planning for your retirement, speak to a financial adviser or call us on 131 267.