You are one year out from retirement. Here are five steps to take now to ensure you’re ready.
The last 12 months before retirement can be a wonderful period, filled with anticipation, excitement and expectation, and often a few nerves. Leaving the workforce for good is a dream come true for some, but for others it can be a cause of concern.
In order to go into your retirement with confidence, experts suggest you use the final year to make a detailed plan of what you might do in retirement. How detailed? Professor Lynne Parkinson, gerontologist1 and Editor-in-Chief of the Australasian Journal on Ageing, says your plan should ensure you stay mentally, physically and socially active on a daily basis. In addition to these important factors you also need to consider the practical aspects of retirement.
What are the vital inclusions in a plan one year out from retirement? Here are Professor Parkinson’s top suggestions:
1) Customise all aspects of your plan to suit your own personality and needs.
Don’t feel you must do anything you’re uncomfortable with. “Success is about discovering what you want to do as an individual,” Professor Parkinson says. “Volunteering doesn’t suit everybody. For somebody that is shy, if they have an interest such as gardening, that can work as long as they are staying connected with family and friends at the same time.”
While one person wants to expand their social circle, another might want to nurture current friendships. Some might want to head overseas for as long as possible while others will be keen to stay as close as possible to their grandchildren. Don’t make a plan around what others expect, but instead make it absolutely unique to you.
2) Expand your hobbies.
What’s the one thing you have never had enough time to do but you’ve always been passionate about? Figure out a way to work this into your regular weekly schedule as it will hopefully grow in importance in your retirement.
Perhaps it is a hobby such as golf, cooking, family tree research or fishing. Maybe it is to do with becoming an activist by lending your skills to those working with the environment or refugees etc. Or it could be about giving back to a certain community by volunteering.
“There is plentiful evidence that if you are an active, healthy person then volunteering is very good for you,” Professor Parkinson says.
3) Make travel plans.
Plan your travel over the next five years. This gives you something to research and look forward to. “A lot of people travel – it’s the Australian dream,” Parkinson says. But she points out that it needn’t be an expensive overseas adventure. “You buy a little van and take a trip around Australia. People who do that are always so happy. It all comes from staying active, which itself comes from having a plan. Going home and staying home never made anybody happy.”
4) Learn something new.
Parkinson recommends taking courses. Whether it’s an informal language course, a part-time series leading to a new qualification or a full-blown PhD (for which many universities will pay you!), the choices are endless. And that is exactly what you now enjoy – absolute freedom of choice.
5) Continue working with your financial adviser.
Meet with your financial adviser to ensure you are financially ready for retirement. Your financial adviser can help prepare you financially for your move to retirement, including advising about your superannuation options in retirement, providing tax-effective strategies, maximising any age pension entitlement if you’re eligible and more.
You are also likely to have more information than you have ever had about what life in retirement might cost you. Do you plan to move house, travel, replace the car, renovate, or all of the above? Will you use more petrol or drive less? Speak your financial adviser about updating your budget in retirement to ensure that their recommendations can take into account your specific retirement lifestyle and spending needs, and advise you on the best income stream option for your super and also allows you to be creative around how you might spend, or invest, the leftovers.
Continue your planning throughout the final year. “Days are very long when you don’t work, so you don’t want lots of long days with nothing to do,” Parkinson says. “Successful retirement usually means you’re busier than ever.”
“As you get older you tend to sleep less, so there are more hours to fill. If a retiree is active and they have interests that can fill their day, that is what matters. That is my overview of what makes a happy retirement – stay connected and stay active by having a plan.”
1 Gerontology is the study of ageing.
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