Retirement planning isn’t just about numbers. It’s about creating a fulfilling life and making a positive impact.
But there’s a challenge. As holidays become less frequent and the home feels too large, the joy of leisure fades. Many retirees find themselves longing for purpose.
Are you ready for the reality of retirement?
Retirement today is different. We’re living longer, so our savings need to last. Have you heard of the ‘retirement smile’? It shows how retirees’ spending changes over time. This concept breaks retirement into three stages: the Beginning, Middle, and Twilight Years. Understanding the Retirement Smile helps you make informed decisions for your long-term goals.
Beginning: This stage is marked by increased activity. You might travel and pursue passions. Expenses could be higher as you enjoy new experiences. Staying healthy and enjoying your retirement are top priorities. What activities would you prioritise in your early retirement years?
Middle: As you settle into a routine, spending naturally reduces. Travel may decline, and leisure expenses stabilise. This stage often sees retirees enjoying home comforts and community, leading to lower overall expenditure.
Twilight: This stage may see a rise in healthcare and aged care expenses. You might not travel as much, but health becomes a bigger focus. Medical costs can increase significantly.
It’s never too early to start retirement planning. Understanding the Retirement Smile is crucial for pre-retirees. It allows for better financial planning. Recognising different expenditure needs at various stages helps you allocate assets strategically. Financial advice can have a big impact. It means balancing enjoyment in the early years, managing expenses in the middle years, and preparing for healthcare costs later.
Adequate preparation, with an understanding of retirement’s highs and lows, will help you navigate life after work.
Finding your new purpose
Retirement isn’t one-size-fits-all; it’s a chance to redefine your purpose. Research shows nearly 60% of retirees feel a sense of loss after leaving work. This period is an opportunity to explore new interests and create a fulfilling lifestyle. Consider these pathways:
- Learning new skills or hobbies: Engage in activities like painting, gardening, or learning a new language to keep your mind sharp.
- Spending quality time with family: Dedicate more time to family and friends. Nurturing these relationships can be rewarding.
- Purposeful travel: Travel with a purpose, such as volunteering abroad or cultural immersion, to enrich your experiences.
Align your financial planning with your lifestyle goals. Consider speaking to a fiduciary adviser who understands your goals and can assess the numbers. They can help create a framework that supports your desired lifestyle while protecting against future uncertainties.
What legacy will you leave behind?
Creating a meaningful legacy isn’t just about what you leave behind—it’s about how you live today. Many retirees find purpose in community involvement, mentoring younger generations, or supporting causes they care about. Here are some ways to create a meaningful legacy:
- Creating trusts for children or grandchildren: Trusts can provide financial support for education or starting a business. They offer a structured way to pass on wealth, ensuring your grandchildren have the resources to pursue their dreams.
- Donating to charity or starting a foundation: Support causes like education, healthcare, or environmental conservation. Involve your family in charitable activities to teach the importance of giving back.
- Volunteering or mentoring: Share your time and expertise at local schools, community centres, or non-profits. Mentor young professionals or students.
- Recording family history and stories: Preserve your family’s heritage through memoirs, video interviews, or a family tree. Sharing stories about your life and ancestors can give your grandchildren a sense of identity and continuity.
What’s your next step?
Take a thoughtful approach to retirement planning. Balance immediate wants with long-term goals for a prosperous retirement. Start planning early, seek professional advice when needed, and stay open to adjusting your plans as circumstances change.
What kind of legacy do you envision? If you’re unsure where to start, our team is happy to have a complimentary discovery call with you. Even if we’re not the right fit, we can help point you in the right direction. Sign up for our mailing list to receive expert advice, tips, and resources on wealth planning topics like investing and estate planning. Discover what clarity, confidence, and certainty feel like.
