To retire or not? Factors many consider.

Funny about that, isn’t it? The cycle of life just keeps rolling on. Suddenly, it seems, we are entering the retirement phase of our life. How did that happen? Time has just flown by…..

Life has been busy and we have been through the so many different stages in life; getting married, having babies, chasing careers, becoming empty-nesters, retirees enjoying travel etc. Every stage of life has had it’s ups and downs, advantages and disadvantages.

Now we find ourselves entering the retirement phase of our life.

In the past two years or so, retirement planning has been a hot topic of discussion between us as a couple, and with our friends.

We would talk about anything related to retirement. Looking back, it is very similar to how my friends and I talked about getting married, having babies, raising children … Whatever was happening, we talked about anticipating what would happen. We shared our hopes and dreams, our doubts, worries and fears. And this is exactly what we did when we talked about retiring.

In regard to retirement, here are common topics of discussion:

Finances

Finances was a big topic of discussion.

While questions such as “How much do I need to retire?” and “When can I retire?” were discussed in general terms, most people did not talk specifically about their personal financial situation. There was a lot of general discussion about superannuation, investments, pensions, part pensions, and anything related to retirement funds.

Most people seemed uncertain about how much money they needed for retirement. Did they have enough money to retire; would the money last; would their lifestyle change dramatically?

No longer receiving a wage is a massive change. It is VERY daunting to consider there will be no income other than income from your retirement investments, or from Centrelink.

For us, it was difficult to comprehend how far our superannuation and investment funds would go. The non taxable amount seemed so small. We had to keep reminding ourselves that the amount was tax free. It helped us to calculate the taxable amount, then add this amount onto the funds we would be retiring on.

The closest experience we could liken this financial change to is managing money when travelling overseas. When overseas the exchange rate is different. To clearly understand the price of purchases we would calculate the amount back to Australian dollars. Initially, this was what we did, whenever we tried to calculate how our tax free funds would cover our living expenses in retirement. We would calculate the figure to include tax, as this is the financial language we understood.

Needless to say, approaching retirement, we were somewhat confused and anxious about our financial situation. And, it seemed most of our friends were too.

In regard to retirement planning, the best thing we did was gain professional advice, before we made the final decision to retire. We had several meetings with our superannuation advisor and accountant.

Health

For us, health was a major factor influencing our decision to retire. Greg had a very successful double knee replacement in 2015. Prior to his operations Greg experienced increasing difficulty walking, due to arthritis. These experiences really influenced our decision to not delay retirement.

Sadly, friends have become seriously ill, or died, in their fifties and sixties. Again, reminding us to not delay our retirement.

For others, health factors have influenced their decisions to continue working. These people believe work contributes to their health – both physically and mentally.

Employment

Many people are unsure whether they want to fully retire, or continue to work part time, or be a casual employee.

Several people we know retired, and after about six months, returned to work. They seem to miss their work friends and the structure and routine of going to work. Or, perhaps they missed the income they were use to?

Greg had been winding down his work commitments for a couple of years prior to his retirement. He was ready far earlier than me to retire.

18 months ago I would not predict I would be retired now. I then believed I would continue working part time for many years. I loved my work. But others factors changed, and this influenced my desire to continue working.

In the end, Greg suddenly made the decision to retire early, in February 2016. He was 58. I then began transitioning to retirement, as I had a business to close. By May 2016, I was also retired.

At the time, retiring seemed so final. So, we both said perhaps, in the future, we would work part time. Saying this to ourselves seemed to help us. It was like work was still a retirement option; if we wanted that option.

We decided to take at least a year off work. I realised I definitely needed to have a complete rest. We decided we would give ourselves a year to find out if we were ready for long term retirement.

Time management – what will we do?

A common topic of conversation between us and our friends has been what we will do with our time in retirement. We talked about our hopes and dreams, happily anticipating retirement. Generally, we couldn’t wait to get a little spare time.

Then, on the other hand, there was worry about what we might do after the dust settled. Would we be bored?

To me, those with hobbies, a sport, or interest, seemed less worried about retirement, and what to do with their time.

Greg never doubted his ability to manage his time in retirement. He is a man who has always been able to keep himself busy.

Whereas. in the last decade, I worked long hours in my business. I became used to making the most of the small amount of free time I had. Therefore, managing free time is probably more an issue for me than Greg.

Some retirees may be bombarded with requests to help; to care for children, or elderly family members, to go on committees, or become a volunteer etc. One friend said she planned to take a gap year after retiring. She said she planned to have a good rest before considering what she wants to become involved in. I’m thinking this is a great statement to just put out there. It may prevent feeling awkward when asked to do something you’d rather not.

Coping at home together, all day, every day

Retirement often means couples spend far more time together than usual.

Some friends expressed concern about their partner being with them all the time. Some felt their partner would cramp their style, tell them what to do, be underfoot, take over ….

We never expected any problems in this regard. However, initially, we did experience some minor territorial problems. Greg became our main cook many years ago. When he retired he also took over the shopping, which in turn tended to influence what we were eating. When I retired, I wanted to reclaim my role of shopping. Initially this caused some minor arguments. This is just one example. But, I had to step back, consider what was happening, and strive to work it out. No way was it my total responsibility. Nor was it’s Greg’s. We both had to get over it and find a workable solution. We now tend to shop together.

Little things like this can fester and put a lot of stress on the couple relationship following retirement. It’s a little like when you first get married. Remember, it’s simply a transition phase. Most couples learn what works for them pretty quickly. I find it helpful to remind myself these transitional changes are normal.

Some friends have also expressed concerns about spending so much time with their partner

For us, we now spend lots of time together. Sometimes, it is healthy for us to do our thing, to be alone, or to be with someone else. We cannot be in each others pocket all the time. Sometimes we just need time out from each other.

Downsizing the home

Our house was way too big. It was the home we raised our family in. It was great when they all lived at home. The house was built on a steep block and had many tiered levels that needed mowing. We knew for some time the house no longer suited our needs.

We decided to sell our house. Our retirement plan is to downsize into a much smaller, low maintenance home. Hopefully such a home will suit us better as we age.

We are not alone in planning to downsize into a smaller home. Some friends have already done so, and others are planning to.

Some people hope to access some of the equity tied up in their large home. We are planning to buy in another location, so this may not happen for us. But it would be great if it did.

However, selling and buying another home costs lots of money. So look into this decision carefully. Seek professional advice (including Real Estate, Accountant, Superannuation, Centrelink advice) before making a final decision about what’s your best retirement option.

Work fatigue

Interestingly, work fatigue was the least spoken about topic, in regard to when to retire.

Some friends talk about simply being tired, and no longer wanting to work. Others talk about being over the work they have been doing for years. They look forward to slowing down and taking it easier.

In the last year before I retired, I think I experienced work fatigue. Other factors outside work contributed to this. It wasn’t until I slowed down that I recognised how fatigued I was.

Travel

Travel is a big topic of conversation among friends intending to retire. Sometimes it seems travel and retirement go hand in hand. It seemed everyone wants to be retirees enjoying travel. If the topic is retirement, then the topic of travel comes up, and visa versa. Most people want to travel in Australia and overseas in their retirement.

We, in particular, are keen to be retirees enjoying travel. And our friends are keen to be active in their retirement and plan to travel also.

Yet, travel takes money. Some will continue working so they can continue to do a lot more travel. Others will compromise on the type of travel they do, so they can retire.

Remember the classic Skyhook’s song –

“All my friends are getting married….”

Well, have a guess what?

All our friends are retiring.