There are many common concerns regarding retirement; but it need not be a leap into the unknown. Here are answers to the five most common retirement questions:
1. How will I adjust to living on a fixed income when I retire?
It can take a while to adjust to living on a fixed income but there are a lot of resources available to help ease the transition. Many banks offer budgeting tools and apps so do check what your bank offers. There are also some other great money management and budgeting apps including:
MoneyBrilliant – this is one of the most comprehensive budgeting and finance tracking tools in Australia. The app can link with your bank account(s) and captures your end-to-end financial picture and is not just a simple budgeting tool – it looks at your bank transactions, credit cards, super and other investments to give a complete picture of your finances. It also helps manage budgeting for bill payments. (Note there is a fee payable for this app.) Available on iOS and Google Play
PocketSmith – this app allows you to create budgets, income statements and balance sheets. It uses charts to show an analysis of your financial situation. It also links to your bank account(s) but it doesn’t include your super or other investments. Available on iOS and Google Play
ASIC’s Smart Money – this is great tool to manually create a budget. It also includes a ‘budget planner wizard’ to help you simplify your budget.
2. Will I get bored in retirement? What will I do with all my spare time? What if I am bored senseless?
The best cure for boredom is to be actively engaged in an activity you enjoy. Start doing all those things you said you wanted to do when you finally had the time! Retirement should be a time of fun, relaxation and productivity.
Whether you travel, take up golf or volunteer at a local primary school, you can enrich your life with many enjoyable activities during retirement. Some of the most popular hobbies and activities for retirees include travel, volunteering, exercising, cooking, arts and crafts, music/theatre/dance, enjoying the great outdoors and spending more time with family.
3. Who am I once I no longer work? Will I lose my sense of identity?
Many of us identify ourselves by what we do. Our job title gives us our identity tag and it can be difficult to lose that identity tag. No longer having a workplace to go to each day together with losing your daily work routine may lead to a sense of loss of your identity, your social network and your daily organisation.
It is important to ease yourself into the world of retirement. It can be beneficial to maintain your social network with former colleagues while you create a new social network and identity for yourself.
Exploring something you haven’t done before could be a great way to stimulate your mind and make new friends with similar interests. You may choose to volunteer or undertake further education. For example, the University of the Third Age (U3A) offers a wide range of courses and activities.
4. Where will I live? Will I need to downsize from my current home? What options are available?
If you are considering downsizing, it is important to understand your goals for downsizing for retirement. You need to consider your financial goals (do you need/want to use the extra funds to help fund your retirement?) and your lifestyle goals (do you want greater access to activities and amenities and spend less time maintaining a larger family home?).
As with most things, in deciding whether to downsize, timing is everything. You should consider housing values and trends in the real estate market, including the costs of buying into a retirement village if that is your preference. You also need to factor in your lifestyle goals. Do you enjoy gardening in your own garden or working in your own shed or are you keen to start enjoying the amenities such as swimming pools, tennis courts and cinema rooms offered by many retirement villages?
See our Retirement Village Checklist for a list of many issues that you should consider before deciding to downsize to a retirement village.
Please note that relatively recent changes to Australia’s Superannuation legislation have brought certain benefits from downsizing and the ability to invest in other assets, however, where obtaining or retaining an age pension is relevant, it is absolutely vital to consider the implications that owning a less valuable or no family home and having more investment assets will have on the amount of the age pension you will receive. It is crucial to seek independent financial advice before making the decision to downsize and sell the family home and invest the proceeds in other assets.
5. Will I lose my independence? What steps can I take to maintain my independence for as long as possible?
There are various aspects that are likely to allow you to continue to enjoy your independence for years to come in your retirement.
Look after your health – A balanced diet (with a few treats thrown in!), staying well hydrated, remaining physically active and sleeping well will have positive effects on your heart health, help you to maintain strong bones and muscles and improve your mood. Whether it is an early morning walk, playing tennis, practising yoga or doing the salsa, maintaining balance is pertinent to managing a positive quality of life and your independence.
Continue to do what you enjoy – Retirement is the perfect time to devote even more of your time to all those activities you enjoy. Living near public transport may become increasingly important so that you can continue to access all your favourite restaurants, cinemas, social clubs and sporting facilities well into your retirement.
Keep up to date with technology – Using technology wisely can help keep you connected to the world and the activities you enjoy. For example, Facebook can help you connect with family and friends who may not live nearby, apps can help with your grocery shopping and banking and things like Uber (a ride-sharing service similar to a taxi) can get you where you need to be without asking a family member to drive you there.
Home care – Home care is one way retirees are able to maintain their independence at home whilst still getting the regular support and care they need. There are many providers of home care services and you may be entitled to receive government assistance to pay for some of the home care services (subject to undertaking relevant assessments such as a Home Support Assessment with a Regional Assessment Service (RAS) or a Comprehensive Assessment with an Aged Care Assessment Team (ACAT) – see www.myagedcare.gov.au)
Home care can include home services such as help with cleaning, ironing and assistance with your housework, to transport, nursing care or having someone assist with an exercise programme, physiotherapy or other allied services.
As you can see, the key to achieving an active, independent and enjoyable retirement involves much more than just having adequate financial resources. It also includes all other aspects of life – enjoyable leisure activities, creative pursuits, physical and mental well-being and good social support. Retirement is a time of new beginnings; the change may initially be difficult, but it shouldn’t be feared.