Modern Retirement – It's More Than Just Finance

09/08/2023

Stephen Wyatt is the Director of Future Years Consulting, providing career coaching and counselling services. He has developed and utilises the Future Years Program to assist Mature Age clients to plan their retirement. Stephen is currently the CDAA National Treasurer and a CDAA Professional Member. This article is a follow up to Modern Retirement - It's up to You.

In my previous blog, Modern Retirement – It’s up to you, we discussed how the concept and practice of retirement has changed across the recent decades, and the need for each individual/couple to plan for this change. In this blog we are going to look more closely at what activities are involved in this planning.

Eight Elements to consider.

A quick search online for Retirement Planning reveals literally millions of ‘hits’ for financial planning, and to a lesser degree, health implications, and maybe a few entries on lifestyle choices.

Finance and Health are important, and provide parameters for our retirement choices, however there is a lot more to consider, especially if you want to have a lifestyle that fits your dreams, yet at the same time is practical for you. 

In all there are eight (8) different Elements you should consider when planning for your retirement. These eight Elements are further divided into two distinct sets, four that are more Personal, and four that can be considered as Structural. 

The Personal Elements are just that, Personal, and only you can provide answers for them. There are no right or wrong answers to these questions, merely your considered and thoughtful decisions or outcomes. 

The Structural Elements are those elements that we might normally consider when approaching retirement and will require some input from a suitably qualified professional.

When contemplating each of these Elements there are two questions you should keep asking yourself:

1. Will the outcome I am considering lead me to a Lifestyle that I/we want and can sustain?
2. When will I/we be ready for this to occur?

The four Personal Elements are:

1. Identity - This is the most important element.  Many people have a strong affinity and identity with their work, however when contemplating moving to the next stage of life, that affinity or identity may no longer exist. People need to grapple with how to define themselves, and who do they want to be in this next phase of life, both separately and together. The question to answer is: Who do I want to be? This element along with Finance (see Structural Elements) help to establish and drive the readiness to retire.
   
   
2. Family and Friendships – Family and friends, directly or indirectly, are all stakeholders in the move to the next phase of life. Especially where you may have some form of carer role for a parent or child, or a role looking after grandchildren. Friends are important at all stages of life, so a consideration is to what effect your lifestyle plans are likely to have on your relationships with your friends. 
   
   
3.  Activity – The Identity element is about what you want to be in retirement, this element is about what you are going to do in this next phase of life.  This element is important in establishing, confirming, or modifying your lifestyle or retirement plan. Areas of investigation in this element fall into six broad categories:
   
   - Employment 
   - Mental Activity 
   - Contribution to Society 
   - Physical Activity 
   - Travel 
   - Day to Day activities
   
   
4. Development – People in their late fifties or early sixties, who are in reasonable health, can expect to live for another 25 to 30 years. This coupled with the potential to undertake new activities in retirement, means that development, (skills, and/or knowledge) are still as important as they ever were. The difference between this and any previous development is that in this situation you decide what you want to do, rather than what you have to do. 

The four Structural Elements are:

1. Finance – The purpose of this element is for you to establish, update and manage your financial position, both currently and into the future. It is strongly recommended that you have, or seek out, a properly qualified and accredited Financial Planner to work through this element.
   
   
2. Health – This is a very broad element. The focus of it is for you to establish and manage your health situation both now and into the future, and how any health situation might impact your planned lifestyle and/or readiness.  It encompasses both the physiological and psychological. 
   
   
3. Accommodation – This element is about assessing what your accommodation or housing requirements might be into the future. It can help you decide whether you continue to live in your current dwelling or look for a move somewhere else.
   
   
4. Estate Planning – A small but important element for you to understand as you transition to retirement. Included in this element is the necessity for you to have your Will/s drawn up and reviewed. Equally important is the nomination of Enduring Powers of Attorney for medical and/or financial for a situation where you may become incapacitated.

While you can focus on these Elements in any order, it is strongly suggested that you follow the order above.  We need to be free enough to dream, and to look at all possibilities and imagine a future for ourselves without any strictures or barriers. However, once those ideas and possibilities have some clarity, we do then need to measure them against what is possible and practicable.