Looking back, when I was a kid my parents got me involved in a large number of activities after school, including tennis, piano lessons, elocution lessons (now called speech and drama), rugby, and last, but by no means least, cubs and scouts.
It’s fair to say some of those activities didn’t work out too well, but others taught me some great lessons that are still with me today. One of the key messages from my scouting days was “always be prepared” a theme taken from the founder, Lord Bayden-Powell, and which originated more around being attacked by your enemies than thinking about retirement, but it’s as good an analogy as I could find for this topic.
Retirement is a funny thing. It seems far off and before you know it it’s just around the corner and you are wondering how you got here. Well, as Talking Heads state, it’s once in a lifetime (if you are lucky to get there at all) and being prepared for the big R is something we all need to think about, even before you are ready to do so.
Let me explain. For many Kiwis, in the past, a lot of jobs were incredibly physical and there came a time when their bodies, not their minds, were telling them to stop work. So, back in the day, many really didn’t have a choice. Both my grandfathers died in their late 60s because they worked in the mines and the coal dust in their lungs eventually got to them.
While there are still a number of physical jobs here in Aotearoa, the majority of Kiwis aren’t facing anything much more dangerous than the risk of paper cuts or RSI, neither of which is too life threatening. So, over the past 50 years or so, we are generally living longer, which is a great outcome for many.
We have all seen inspirational stories of people reaching into their 90s and even 100, doing exceptional things, and thinking ‘wow how cool is that?’. But most of us will slow down before then – at best we might hope for 20 more summers if we retire at 65, and they might not all be sunny affairs. So, it’s a good idea to plan how to make the most of them while we can.
There are a heap of checklists and plans you can follow around how much money you’ll need in retirement. But have you thought about what else is important to enjoy the journey, given we are all going to the same destination no matter how rich we are?
Here are five ideas to help you start working on the other stuff:
1 Write down the things that are important for you to do now and what you want to continue doing when you stop paid work. For example, I want to play tennis into my late 70s. So, what do I need to do to achieve that? Well, keep playing for a start, maybe make time to get regular lessons again, and keep as healthy as I can along the way, without sacrificing the treats. Chocolate comes to mind for me here. It might mean I have to walk more (which I hate by the way) but, as they say, if you don’t use it you will lose it.
2 How will I still maintain purpose and relevance when I leave my job/career? I have seen many incredibly successful people hit the retirement wall and struggle to get over it. Being out of sight, out of mind is challenging. When you are used to the phone ringing or people coming to you with problems or challenges at work, it can be hard to adjust when you leave. The phone stops ringing, people don’t need you and your perceived value goes away. So, before you get there, think about activities, both paid and unpaid, that you could explore or plan for when you make that decision. It could be sitting on a board or two; it might be getting involved in your local community and using your work and life skills to help others; or it could mean just working fewer days.
3 Write down a list of things you have always wanted to do but never had the time to complete. It could be as simple as driving along in the countryside and stopping off at that small town or village that you never had time to explore, or a big ticket item like going overseas to see the northern lights in Iceland. It might mean spending more time with family and friends or taking up a new hobby. Don’t forget to discuss the list with your partner or family as well. Letting them know helps them plan a little as well.
4 Have a chat with a friend, colleague or family member who has already retired. Ask them how they felt when they made that decision (or in some cases had no control), what were their fears and hopes? What did they wish they had done more of before getting there and their biggest regrets?
5 Enjoy the journey and understand the benefits of decumulation. I know I wasn’t going to talk about money but, while it’s not everything, (my mum always said to me if you don’t have your health, you have nothing) it does provide you with choices. They key is knowing how much you need to be happy. That’s like asking someone how long is a piece of string. So, sit down and do your own numbers, but take into account National Super, KiwiSaver and other investments, even your home or other assets you might have. Another option might be to downsize your house or live in a different area and release some capital.
The worst thing that could happen to me is I work another seven years, which would mean I would have worked 48 years without a break, only to have an accident or health issue that robbed me of all the experiences I had put off when I thought I would have more time to enjoy them.
I’m not the fittest fellow it has to be said, but I have caught myself recently thinking, while standing in the mosh pit in front of a live band at Auckland’s Powerstaion, how much longer will I find this enjoyable? Ages I hope, but there will come a time you might find me at the back of a concert, smiling away knowing I did it for as long as I could and not regretting a minute of it.
This article was written by a real person, with real life experiences, and uses storytelling to help make financial wellbeing interesting and, hopefully create a smile or two along the way.
Disclaimer: David Boyle is Head of Sales and Marketing at Mint Asset Management Limited. The above article is intended to provide information and does not purport to give investment advice.
Mint Asset Management is the issuer of the Mint Asset Management Funds. Download a copy of the product disclosure statement here.
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