Retiring by choice - something only one third of people today do
Have you got an Epic Retirement Plan B?
In this edition
Feature article: Retiring by choice - something only 33% of people today do
Prime Time podcast: The feelings of invisibility in midlife with Jane Tara
From Bec’s Desk: My big milestone
Your letters: A ripper from Peter about safe spending numbers
I invite you to take the Epic ‘Retirement Planning’ Survey. This is a detailed survey that dives into how you feel about the process of ‘retirement planning,’ what tools you are using and how you are progressing. It also gives me a read on how confident you feel, and what you might need to help you.
It’s all multi-choice so it should be quick and easy. I’ll be using the results to produce a report (which I’ll share with you) and educate the industry - guest speaking for financial advisers, super funds and other companies who really want to do right by you, the modern pre-retirees. I’ve added a little prize too… Three people who complete the survey in full, including the competition at the end, will win a $100 VISA card (conditions apply).
Retiring by choice - something only 33% of people today do
We all talk about retirement as a time of life when you get to choose what you do with your time and hopefully, really get to enjoy yourself. And, if you have planned for it and are prepared, both financially and functionally when the time comes, there is no reason why it shouldn't be epic.
I make a lot of noise about getting yourself ready for retirement and pacing yourself into that stage of life slowly when the time feels right for you. The fact is, you don’t always get to choose when you retire. In fact, the team at Colonial First State sent me some research this week that showed that only about one in three Australians actually retire because they want to. The rest were kind of pushed into it by stuff they couldn’t control.
It’s confronting when you stop and think about it.
According to their survey, 33% of retirees they surveyed retired by choice but about 28% of retirees had to leave work because of health problems. And, 7% had to retire because their partner was dealing with health issues.
Then there was 11% who got laid off, 4% who felt like they weren't wanted at work anymore, and another 18% who had different reasons for retiring. I’m quite sure some of them would have stepped out of the workforce to care for their ageing parents, which the ABS Census says 4% of retirees do.
Now, why does this matter? Well, it means planning for retirement by choice isn't something you should put off unless you want to arrive in the position where you are forced into it at a time that is not of your choosing. You have got to start thinking about it early and with some pragmatism, knowing you have a plan, but also recognising that things might not all go to that plan.
So, what steps can you take if you’re worried about being one of those people forced to retire early? For a start, you can use those worries to fuel you to work on your preparation and understand your best case plan, and a less optimal but sensible plan too. If retirement comes early you’ll then know where you might be able to adapt your retirement planning, and be clearer on the steps you need to take versus the ones you can choose to take. Here’s some sensible steps to think about:
Craft a Plan A and Plan B
Life has a way of throwing unwelcome curveballs, so it's wise to have exciting goals and an understanding of your backup plan. While you may have a dream retirement scenario (Plan A), it's also worthwhile outlining a contingency plan (Plan B) in case things don't go as expected. This means thinking about how you can adjust your retirement goals and vision to adapt to a scaled back version in case there’s unexpected or expected changes to your circumstances. Maybe your Plan B reduces your ambitions to align your post retirement income with your pre-retirement income; or allows you the budget and time out of active retirement to care for a loved one before resuming your travel and lifestyle ambitions a little later in life. Or, it might see you downsizing to tip more funds into superannuation earlier so you have enough to live a modest or comfortable retirement rather than working a couple more years.
Remember, some flexibility is key when it comes to retirement planning for tricky situations. By preparing for different scenarios, you'll be better equipped to navigate whatever challenges may come your way.
Become acutely aware of your budget
If you build and understand your retirement budget based on your goals, you’ll have the perfect tool to use to recalculate your costs of living should things change.
You’ll want to separate your budget for your cost of living, required one-off expenses you need, and your epic retirement experiences. When you separate them you will find it easier to build the budget, but also to de-construct it if you need to cut your costs of living or axe some leisure costs. You can learn how to build your budget in the How to Have an Epic Retirement 6 week program.
Explore ways you can start to diversify your income in the lead up to retirement
Relying solely on one source of exertion-based income as you loom toward retirement can leave you vulnerable to shocks. Basically, you can be laid off at any time, and that risk gets higher with age and ageism in the workplace sadly. To mitigate this risk, many people consider diversifying their income streams in pre-retirement, especially if they want to play an ongoing role in the workplace and start to enjoy a part time retirement alongside it. It’s something many people call building their ‘portfolio career’. This could involve exploring part-time work or consulting opportunities or even building a portfolio career, renting out property, or investing in dividend-paying stocks or bonds. By diversifying your sources of income, you'll create a more resilient financial foundation that can better withstand unexpected changes in your retirement plans. Plus, you should have greater flexibility to adapt your income strategy if early retirement in a key role becomes a reality.
Remember, being proactive and prepared for your dream situation, but also your Plan B is key to making sure you make your retirement as epic as it can be, even if the planning doesn’t quite go to plan.
This week I am talking with Jane Tara, the author of Tilda is Visible, one of the hottest bestsellers on the women’s fiction list right now.
Tilda is visible is a very relatable story for women in modern midlife. It’s about a woman in her 50s who wakes up one morning and her little finger and her ear are missing. She’s diagnosed with invisibility by her doctor. The story is a comedic fiction book about her journey to see herself again. It’s an easy read, and I love that there’s a juicy love interest, and a few really powerful self-help lessons woven together into the book. It tackles a time of life that isn’t written about in this way very often. We don’t talk enough about the feelings of invisibility in midlife.
The book is resonating because it talks about a very relatable stage of midlife that may not be commonly spoken about.
Listen now
LISTEN HERE - LATEST EDITION (E17) - OMNY
or listen on APPLE PODCASTS
Exciting moment yesterday! I received my first royalty cheque as an author. And last week we charged through more than 10,000 books sold via retailers and even more through audiobooks, ebooks and industry orders.
For those unfamiliar with the writing world (which I was previously), apparently 10,000 printed non-fiction books sold in 9 months through retailers is a very healthy number for a purely Australian focussed book. And receiving royalties as an author isn't always guaranteed or even common, making this moment even more special.
It is a wonderful feeling to know your little passion is well-read. I'm all for cherishing the journey and the little moments. Thank you to everyone who has supported me along the way and to everyone who has bought the book and told their friends about it – your encouragement and support for Epic Retirement means the world to me!
In case you haven’t got a copy yet - you can buy How to Have an Epic Retirement, the book on Amazon and Booktopia and in many bookstores. It’s in reprint again! Keeps running out of stock in stores 😎.
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Last week I attended a conference packed with academics, actuaries and superannuation product specialists in Sydney about the ‘future of the retirement phase of superannuation’ and the conversation was all about longevity. It was all about how we’re going to be able to make peoples’ (your) money last with greater confidence in retirement.
The industry is deeply focussed on this right now, trying to work out what ‘financial products’ they can and should offer pre-retirees and retirees to try to give them more certainty about their retirement income, especially if they think they’ll outlive life expectancies.
There was no conversation about improving pre-retirement education in this room at all. I guess you’ll just have to keep asking your funds about that.
But, if you’d been a fly on the wall, you’d have felt very pleased at how much attention building products for those approaching retirement are getting in the industry right now. Everyone is trying to work out what products they can offer you so you can simply relax and have an epic retirement. Most products will take months or years to enter the public domain. I’m going to dive deeper into this as they show their hands, to better explain the whole concept of retirement financial products. But not until it’s clear what features the industry is prioritising and for whom each is targeted. So hang around, I’m watching this space.
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The How to Have an Epic Retirement Flagship Course is up to week 3, and the 250+ people doing it are continuing to rave about their experience. Last week we covered retirement budgeting which I received many complements for. This week it’s all about superannuation, financial advice and estate planning. If you’d like to come to our next 6 week program, we’re taking expressions of interest for a May/June/July program. I’ll release more details after Easter.
And finally, thanks, there has been a huge response to the Epic ‘Retirement Planning’ Survey. I am absolutely delighted at the insights you’ve shared into how you feel about retirement planning. We’ll start on the report very soon, which I’ll share with you when it’s released at industry events coming up.
Many thanks! Bec Wilson
Author, podcast host, columnist, retirement educator, and guest speaker
I got this excellent email from Peter today. Such a great question that I had to share it with you. I wish everyone would read things this closely! Thanks Peter.
Don’t hesitate to send me your questions… I love to answer them so long as they aren’t personal financial advice. Email Bec@epicretirement.net
Hi Bec,
I recommend that you have a closer look at the Challenger table featured in your recent podcast notes and Sydney Morning Herald article about safe spending as I can't see how it can be right.
Cheers, Peter.
Hi Peter
It’s interesting. You’ve just discovered the ’sweet spot’ between where someone gets income from the age pension and where they have to fund that gap without access to the pension at all. 😉
There’s this strange little anomaly in our retirement system that’s truly worth understanding. It’s the fact that people with less superannuation can actually end up earning more retirement income - just by knowing how to use the systems of retirement well in Australia.
It’s called the “sweet spot”, and it’s where both singles and couples with a lower superannuation balance leverage the age pension alongside their superannuation income stream to earn more in retirement income than someone with a far larger superannuation balance can at the same drawdown rates.
I have written about the sweet spot here in the Sydney Morning Herald a few months ago. https://www.smh.com.au/money/super-and-retirement/the-sweet-spot-how-to-earn-more-while-having-less-in-retirement-20231124-p5emjw.html
Admittedly, the Challenger projections are designed for ‘safe spending’ too, so don’t expect them to be aggressive. Have a great day! Make it epic!
Cheers Bec