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Retirement – do not look back with anger!

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Nearly every Saturday at 11.30am, Donna (my partner), Scout (my dog) and I visit my mum in the aged care facility where she now resides.

Prior to COVID-19, visiting mum meant we were able to take her for out for coffee or to the shops, which she enjoyed immensely.

During this time of COVID-19, taking mum out has become difficult and not an experience that she likes or understands. The aged care facility asks that she wear a mask when she is out, and on her return to the facility, her contact with the other residents is restricted for a period of time.

My mum has dementia, and unfortunately she does not understand what is happening or why her movements are being restricted.  She becomes depressed, angry, and bitter with her life, which is understandable.

Do I think this will happen to me as I grow old? Will I become angry with the world as my health declines? Bitter and depressed because I have not done or remember doing all the items on my bucket list?

To be honest, I do not know. It maybe something I have no control over, but I can try to take all the steps I can to ensure it does not happen.

I am sure we all know people in the later stages of life who find that their health is now restricting their options. They find that they no longer have the energy or the physical ability that they had in their 50s, 60s and even their 70s. For some people, this can become a time of bitterness and despair, as they believe they have not lived their life to its’ full potential.

The decline of a person’s health as they age is very difficult to stop. You can take steps before it begins, by eating right, not smoking, possible drinking less and being active, to help slow the process; but the reality is that as you reach your 80s and into your 90s, for the majority of people their physical abilities and their strength will diminish.

So, what can you do to ensure that when this does happen that your life in your 80s and 90s is not filled with feelings of bitterness and regret? How do you build a plan so you aren’t constantly thinking, “if only I had acted earlier and understood what retirement and this stage of your life was all about”

The stage of your life after your working life requires a plan, and no, I am not talking about a financial plan. In your retirement you need to have a “purpose” and a plan to achieve this “purpose”. This “purpose” will be different for every person, depending on your finances and interests but you need to have at least one.

It does not matter whether it is travel – becoming a grey nomad, living overseas for a period of time (all which are restricted at the moment) – doing volunteer work, or learning a new skill, people should not leave their working lives behind until they understand what they are going to do in the next stage of life.

Having a “purpose” and plan is important as it provides the stimulation required to keep you healthy both physically and mentally.

It is important to be realistic in your planning, understand how many dollars you require to pay your weekly bills and then ensure you have enough left over to achieve your purpose and dream in retirement.

This stage in your life is just as important as all the other stages of your life. It is a period of time that could cover more than thirty years. It is a long time to live with regrets of what you didn’t do, or should have done, because there was no thought or plan put into this period.

I am sure that your grandchildren (if you have them) would much rather listen to someone with tales of a wonderful and adventurous life over a person who is continually complaining about the things they did not do.

Develop a plan. Understand what you want to achieve in retirement and talk to someone about how you are able to achieve the financial goals required to ensure your dreams come true.

 

Source:  Mark Teale | Centrepoint Alliance

Do we need permission to retire?

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Do we need to seek permission to retire? The answer is “yes”.

If we have a significant other, having them in agreement is probably a smart idea. Retirement is a significant life event and all parties need to be on the same page, committed and in agreement.

Having the agreement of your employer is also very important. After all, we would all like our exit from the workforce to be mutually satisfactory to all concerned. We want to leave on good terms.

Retirement may be forced upon us as a result of ill-health, redundancy, the failure of a business, or the need to take time out to care for unwell or ageing family members. Often, we don’t have a lot of control over such circumstances.

On the other side of the equation, retirement may be driven by the fact we have reached “retirement age” – although there is no longer an official retirement age in Australia, except in some occupations; or we have reached the age where we can access our superannuation or receive the government age pension.

But for others, retirement might result from the fact we are just tired of the day to day grind of getting up and going to work or our work is no longer fulfilling.

For some, retirement simply can’t come quickly enough because we have so many other things we would prefer to be doing. I think they are the lucky ones. They have purpose.

Many people often retire without a sense of purpose. They just fiddle around the house, maybe watch afternoon TV or take the dog for a walk, or head off to a shopping centre, just to fill in time. It is not uncommon for people to feel lost in retirement.

When we have our retirement mapped out and we have plans, we have effectively given ourselves permission to retire. On the other hand, if we simply meander through retirement without purpose, perhaps we haven’t given ourselves that permission.

For many, retirement will consume around 25 years of our life. That is a long time to be living with regrets. If we are not ready for retirement, then we shouldn’t retire. Even if we are unable to continue in our present job, there are options out there.

Some will say that it is difficult for older people to find work, and that is true, however there are many charities that are keen to get all the volunteers they can and there are many employers willing to take on part-time and seasonal workers. Alternatively, take the skill developed over a lifetime of working, and start your own small business or consulting practice, or commercialise a hobby.

When retirement beckons, embrace it with passion and purpose. Have a plan and most importantly, give yourself permission to do whatever it is you want to do, when you want to do it, without any feeling of guilt.

 

Source: Peter Kelly | Centrepoint Alliance

Age Pension – what, when and how much?

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The big question – Does paying taxes while working give you the right to expect an age pension when you decide that you want to retire? – The short answer is no.

What is the age pension?
The age pension is a safety net to support people in retirement who do not have the necessary financial resources to either fully support or partially support themselves.

When can I access the age pension? At what age does a person qualify for an age pension?
For over 100 years, the qualifying age for the age pension was 65. In 2017 the qualifying age increased by six months and will continue to increase by six months every two years until 2024, when the qualifying age will reach 67.

The following table provides a more comprehensive overview.

How do I know if I am entitled to an age pension?
This is a complicated question which is very dependent on a person’s situation. Are you single or a member of a couple, do you own your home or are you renting, how much do you have in assets and what is your income?

The current full age pension is $933.40 per fortnight for a single person or $703.50 per fortnight for each member of a couple. This full age pension is adjusted twice a year, in March and September.

The age pension entitlement is calculated under both an assets test and income test.

Why is the age pension assessed under both tests? If a person’s entitlement is less under the assets test, then what may be payable under the income test, their entitlement is determined by the assets test as this test pays the lower age pension.

In addition to a person’s age and their assets and income, a person applying for the age pension also needs to meet a residency requirement, you must be an Australian resident, and in Australia on the day the claim is lodged. You also need to have been an Australian resident for a continuous period of 10 years or have resided in Australia for a number of periods that total 10 years with at least five of these years in one continuous period.

Australia does have international social security agreements with a number of countries and residence in these countries may count towards your qualifying Australian residence.

As you can see, qualifying for the age pension is not as simple as turning a certain age. It can be complicated, and it would be advisable to talk to an expert to ensure you do receive the right entitlement when you apply.

Source: Mark Teale | Centrepoint Alliance

When is the best time to start planning for retirement?

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Planning for retirement is a bit like planting a tree, the best time to plant a tree (or start planning for retirement) was 20 years ago! The second-best time to start planting or planning is now.

When we think about retirement, from a financial perspective, we are often planning for a very long time. With an increasing life expectancy, the average Australian can expect to spend 20 to 30 years in retirement. In today’s society some people are looking to spend almost as much time in retirement as they spent working.

All too often we hear stories of people who are about to or have just retired and they visit a financial planner, often for the first time to get their retirement sorted. After all, super and the age pension is very confusing unless you have been closely involved with it for a long time.

Often when planners meet with prospective clients to discuss retirement, it becomes apparent that the retiree has insufficient savings, and particularly super, to support the type of lifestyle they have dreamed of.

What are some of the things I have learnt about planning for retirement, and would tell a “younger self”?

1. Don’t think you are too young to start planning for retirement. Time goes by very quickly and we find ourselves sitting on the threshold of retirement asking, “where did the years go?”

2. Aim to save 15% of income in a retirement savings account, from as early as possible. Employers are currently required to contribute 9.5% of a person’s salary to super. This is intended to increase to 12% over the coming years. However, by voluntarily contributing extra salary to super can mean the difference between a comfortable, and a very modest retirement. It can also be tax effective.

3. Eliminate debt as soon as possible. It is all too easy to get caught up in the trappings of everyday life and consumerism by wanting all the latest gadgets and toys. But the reality is, we often don’t need them and all we are doing is adding to our debt.

If we are to have the type of retirement we have always dreamed of, start planning as early as possible. Find a good financial planner who will work with you to help you set goals, develop smart savings strategies and invest wisely for a profitable future.

 

Peter Kelly | Centrepoint Alliance

What are the things retirees fear?

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That question: ‘What do people approaching retirement, and those already retired, fear the most?’

The first thing that springs to mind is the fear of not having enough money, and perhaps the fear of the money ‘expiring’ before we expire.

What about loss of relevance?
We go from being a business owner, executive, professional, or a CEO one day, to a retiree the next. No matter who we are and what we did, adapting to retirement is going to be a challenge for many people as they re-frame their life and adapt to their new role.

What will I do with my time?
Many retirees say they simply don’t know how they ever had time to work. They are simply so busy. They are the lucky ones. But for every busy retiree, there is probably another that is bored, lonely and simply doesn’t know what to do to fill in their time. They simply ‘fiddle’ around and lead a life that lacks direction.

Becoming single?
Resulting from the loss of a life partner is perhaps one of the biggest fears that many older folks have. Perhaps they have been together for forty, fifty, or even sixty or more years and then one is gone. It is not only the loss of a spouse that can be devastating, it is also the loss of family and friends as well. Include younger people in your circle of friends.

Ageing itself?
With age comes the possibility of illness, disability, and a loss of independence.
As our minds and bodies age, the things we used to do so easily become a real chore. We simply slow down to the point where life becomes a real drag.

What the government might do?
With an ageing population, the costs associated with providing pensions, health and aged care continue to spiral and present an ever-increasing challenge for any government

 

 

Source:  Peter Kelly | Centrepoint Alliance