The first year of retirement is a time of transition, but if you can successfully adjust to the major changes that come with not working, you can reap big rewards.
Some of the changes may include adjusting to no longer working full-time and earning a regular salary, keeping your mind active without the stimulation of work, and planning to ensure your money can go the distance in retirement.
The three paths in early retirement
Renowned retirement researcher Professor Robert Atchley identified a number of ways people react to leaving work permanently, and split the period immediately after this into three possible paths:
• The honeymooner, describing people who dive into many of the fun activities they didn’t have time for previously, especially travel.
• The immediate routine follower, describing people who had full and active schedules outside of work before retirement, which flows into busy lives soon after retirement.
• The relaxer, describing people who choose to do very little in their early retirement, after having had busy careers with limited time to themselves.
How to prepare
To prepare for retirement, it’s a good idea to begin thinking about it and planning for it before it is upon you.
You might like to consider easing into retirement by reducing your working hours or moving to part-time work before you retire.
You should also try to determine what sort of retirement you want, using the three paths above as a guide, and use the time before retirement to start exploring your goals.
For example, if you think you’d like to caravan around Australia in retirement, hiring a caravan for a short trip might be a good idea ahead of buying one. Likewise, if you’re considering a sea or tree change, renting in the area first is a good way to try the lifestyle before selling up.
To help achieve your retirement goals, you’ll need to take stock of your finances. If you find your super needs a boost, now is the time to act – especially with changes to super that are coming from 1 July this year, which will affect caps on contributions.
How we can help
If you’d like help with planning for your retirement, speak to your financial adviser, or call us on 131 267, Monday to Friday between 8.30am and 7pm (AEST) or use our find an adviser tool if you don’t have an adviser.
Many retirees are being overly cautious in preserving their savings to ensure what they have lasts their lifetime.