What should be in your retirement plan?
What should be in your retirement plan?
Most people are afraid of retirement planning. It’s a process that has, over many years become all about money, building up a stigma of being hard, confusing and complicated.
In this edition
Feature story: What should be in your retirement plan?
Prime Time Podcast update!
From Bec’s Desk: A short week with lots to talk about!
What should be in your retirement plan?
Most people are afraid of retirement planning. It’s a process that has, over many years become all about money, building up a stigma of being hard, confusing and complicated. And most people perceive it to be an expensive process too. But in today’s world you can and should be the driver of your retirement planning process, and money should only be about half of it. You’ve got a long life to live, if you plan to have an epic retirement, so you’ll want to consider your health, happiness, sense of purpose as well as your finances.
So let’s break down what I think you should have in your retirement plan today, so you can start to see how you can drive it, getting advice from your financial planner, your super fund and insight from health practitioners as you see fit.
1. Goals - start here
You need to see a bigger picture of the years ahead as you head into the process of planning for retirement. Create some visions. They might be goals that have absolute clarity, or they might be foggy pictures of some of the things you’d like to do in an ideal world. Both are good. They give you something to plan for. Think about these seven big areas to form a framework you can plan around. Write them down.
Where you see yourself living and at what standard.
Which relationships are important to you in your retirement years?
What you want to do with your time?
Whether you plan to keep working once retired.
What are your travel aspirations?
How you plan to maintain your health.
What’s important to you in the years before retirement - do you want to start experiencing more, sooner?
Goals that take in these areas will get you thinking, and allow you to create a plan that goes far beyond the financial considerations. From this, you’ll have a well-rounded picture of your ideal retirement.
2. A debt demolishing plan
Debt can cast a long shadow on your retirement years. So one of the first things on your list should be to contemplate how much debt you have, and to prioritise how you will pay it down.
Make a list of every loan and outstanding credit card you have, and write next to each the interest rate you are paying on each. This gives each loan or debt a level of priority based on how much it is costing you. Then calculate how much you need to repay each month and each year to pay them off, ideally before you reach retirement age. And finally, put in place the direct debits or planned payments to achieve this. You’ve got to stick to your guns - but it really is worth it. If you can’t pay down your debts before retirement, you might want to think about getting help with your strategy to reduce debt other ways. Financial Counsellors can help.
3. A budget that allows you to live within your means
The years leading up to retirement are crucial years to understand your budget and live within your means. Generating a surplus from your household budget is pivotal, offering you the flexibility to pay down debts or contribute to superannuation or both. Construct a detailed budget if you haven’t already, scrutinise your outgoing expenses and evaluate whether you are maximising your income sources. Living within your means helps you achieve your retirement goals sooner, it also drives your financial confidence later in life.
[I teach you how to build your pre- and post-retirement budgets in the book, How to Have an Epic Retirement, and book buyers can access a powerful custom-built excel budgeting template too]
4. A savings plan for retirement: Maximising super contributions
Once you’ve got your debts under control and you understand your budget surplus, the next step is to take advantage of the tax concessions offered to contribute more into superannuation. You can contribute up to $27,500 per annum into superannuation every year at just 15% tax, and if you haven’t contributed the full amount in recent years, know you can carry forward these unused amounts for up to five years giving you more room to save in the years ahead. Try your hardest to squeeze some extra savings into your superannuation accounts as early in life as possible.
5. A plan to harness the power of compound investing
You need to understand and be in the driver's seat on any money you have invested as you head towards retirement, that includes your superannuation. Don’t just contribute it into a fund and ignore it. The real power of investing lies in the long term benefits of compound investing, which will build your wealth passively over many years, if you are getting good returns year on year, and not paying too much in fees.
6. Some plans to build a leisure and happiness outside work
When you think about retiring, you don’t just need to think about your financial plan. You really need to start thinking about and working on things that bring you happiness. This step isn’t really something you can outsource to your financial advisor or superfund, but it is important. Start the process with some deep self-contemplation. What do you like doing? What do you like learning more about? And who do you want to be spending your time with? If you come up blank, it might be time to try a few new pursuits outside work and see what sticks.
7. A greater understanding of where you will find ‘meaning’ or identity when you stop working full time
Most people in full time working careers take pride in the identity they get from their job. In fact, when people introduce themselves they often use their job, role or title to define their identity so when they don’t have that title anymore they can feel a bit lost. But that doesn’t have to be the case if you know what you do, and you are really happy with it. The reality is, retirement doesn’t mean stopping work fully anymore, but it certainly does mean, for most people, developing things that they do beyond full time work. You might continue to work, or participate in work-style projects for charities, community groups and activities that give you a sense of higher purpose or meaning. Whatever you do, try to find something that keeps you learning and growing, and engaging with people outside your home.
8. A plan to improve and look after your health
Finally, the last and possibly the most important thing to have in your preparation for retirement is an understanding of your physical and mental health, and how you plan to improve on it over the years ahead. There’s no-one to stop you in the retirement planning process and say ‘hey, you’re ignoring your body’ and your mental health here buddy, but there should be. So think about your cardiovascular exercise, your muscle mass and your balance, and manage your weight. Consider whether you are in optimal mental health and think about what you should be doing. Write it into your plan and make the behaviour changes. You’ll be the beneficiary.
The best place to really deepen your knowledge on how to do all the things above is in How to Have an Epic Retirement - Australia’s #1 bestselling retirement book in 2023. And the #2 bestselling ‘money and consumer issues’ book by an Australian author behind the legendary Barefoot Investor.
This week the Prime Time podcast is having a breather, with Season 1 now finished, and Season 2 firmly in production. Last week, the podcast burst onto Apple Podcasts’ top 200 list, getting to #133! Not bad for a show in its first season.
The podcast has blown us all away with more than 50,000 downloads so far. So thanks to everyone who has spread the word, or had a listen. And thanks to our terrific guests. Here’s our last three wonderful episodes, in case you’re looking for inspiration. Or, you can see all the episodes here and pick one to start you off. There’s so many doozies!
Make sure you click subscribe and download on your chosen podcast platform, so you receive it each week - and sign up for the separate Prime Time newsletter at primetimers.net. And if you love it, leave us a review and a rating - please!
S1E12: How to beat relevance deprivation syndrome: With Jim Kilkenny
When Jim Kilkenny retired from a very successful career in financial services, he started suffering from something called 'relevance deprivation syndrome'. It's that feeling of listlessness, being at a loose end, a drop in mental engagement and a clear lack of contentment. Jim describes it as a "vacuum of boredom." LISTEN HERE
S1E11: Happiness, marriage and mismatched expectations in retirement: With bestselling author Joanna Nell
Joanna Nell is a doctor, an advocate for positive ageing and the author of five best-selling novels. Her latest book, 'Mrs. Winterbottom Takes a Gap Year', is a heartwarming exploration of mismatched expectations in your Prime Time years and early retirement, and living life in the moment. LISTEN HERE
S1E10: Managing your cost of living and budgeting for retirement
The rising cost of living is biting everyone hard right now, so this week Bec Wilson and friend of the show, Spencer Howson, talk about how we can squeeze more out of every dollar. Bec and Spencer work through some helpful tips for managing the cost of living, how to go about budgeting in your pre-retirement years, and how to take a hard look at your big financial picture, contemplating the changes you might need to make in the months and years ahead. LISTEN HERE
Or visit our Primetimers.net website and sign up for the dedicated podcast newsletter.
2024 is off to a great start! And they say this country doesn’t start ‘til after Australia Day 😉. I’m still buzzing from the news that the book was the #1 retirement bestseller in Australia in 2023 on the same week that our podcast burst onto the Apple top 200 shows list!
First I want to thank everyone who’s written in to me with personal notes about getting the book for Christmas and enjoying it; and enjoying the podcast. We’ve seen thousands of new subscribers arrive, so you’re not alone and your personal notes are like fuel to my fire! You can always email me, and even ask questions and suggest topics you want covered at bec@epicretirement.com.au. I’m going to publish letters every now and then in this newsletter with your permission - so please, get writing.
Secondly, the wider pre-retirement education business I am passionate about building is starting to grow quite quickly. I’m now doing:
‘lunch-and-learn’ 1 hour presentations in workplaces or online for workplaces and other groups,
keynote speeches at conferences
presentations at financial advisers’ client events
half-day and one-day masterclasses on planning for an epic retirement - run in-person or online in workplaces and for companies and their clients.
And - custom requests for events too!
If you are keen. Just drop me a quick enquiry at bec@epicretirement.com.au and I’ll be in touch. We’re prettying up the website to showcase what we’re doing and we have an info pack.
Third, our How to Have an Epic Retirement Flagship Online Course will be launching to a limited run in the next couple of weeks for it’s first test - and I’ll be offering a discount because I want to ask for your detailed feedback and input. I can’t believe how well it is coming together. It’ll be run over 5 weeks, bringing you 14 modules, 100 videos, and 3 live sessions - and loads of helpful worksheets. It’s going to be awesome. You can put yourself on the expression of interest list to hear more here.
Finally, I’m loving dabbling in talkback radio. Yesterday morning many people heard me on the ABC Summer National Program talking about the things to think about when considering moving house for or in retirement. And, I’m also doing regular spots on ABC NT in Brekky and ABC Southern Queensland every other Monday afternoon in Drive (this is a radio week). I dearly love it when you call and text in.
Keep an eye out for my weekly column in the Nine Newspapers on Sundays. You can read all my recent columns here.
I can only hope someone in politics figures out a way all Australians can celebrate our lucky country all together before next year. Wishing you wonderful long weekend! Until next week make it epic!
Many thanks! Bec Wilson
Author, podcast host, columnist, retirement educator, and guest speaker