Seven things you should think about long before you retire

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We all know retirement has changed fundamentally as current generations tackle it. It’s not a time to stop and sit back anymore, or a time to be put out to pasture by your employer. Modern retirement and the ten or so years leading up to it could, in fact, be the best years of our lives, if we approach them with curiosity and intent. But what do we need to be intentional about?

I launched my new podcast this week with the Nine network (owner of this masthead), called Prime Time with Bec Wilson. The first episode was a terrific conversation about the seven things I think everyone should know and do before they start changing their life for retirement. These are the most important things to think about before you get to the point where you even start to wind back your workload or shift your way of life.

When it comes to preparing for a great retirement, there are a number of things to keep in mind.Credit: Sam Bennett

1. Know how long you really might live. This is a big question. The government says that people who are 65 right now will likely live to the ripe old age of 85 for men and 88 for women. And the intergenerational report takes it one step further, saying today’s 40 and 50-year-olds might live to 89 for men and 91 for women. And those are just the medians – 50 per cent of people will live longer.

It leans heavily back on how you’ve looked after your body so far, and how you intend to look after it in the future. If you plan to look after yourself well, you might want to consider that in your self-picture, so you set the right goals, ambitions and curiosity in place to keep yourself fulfilled over your long life.

2. Decide on some goals. We all have goals in our first half of life but we often overlook setting them for the second half, other than our holiday goals (we’re all pretty good at them). I think it’s a remnant from when we lived shorter lives. But goals are crucial. They move us forward, giving us things to aim for and they set the framework for our budgets, which frankly, we can’t do without.

If you go into retirement without goals you might find yourself rudderless, lost and even ageing unnecessarily fast. So consider at least putting in place some guiding principles for how you want to live your life, and some short and medium term ambitions you aim to achieve and drive yourself forward.

3. Work on your financial confidence. Retirement sucks if you don’t feel confident about money. Note I didn’t say it sucks if you don’t have a lot of money. You can have a great retirement, with only a little bit of money at your disposal. You just have to know and understand how to make the money you are working with work for you.

You might be planning to draw an age pension and supplement it with a small income stream from your superannuation, or you might be planning an entirely self funded retirement. Both need you to build your confidence up.

And you can do that by properly understanding your budget, and knowing how the systems of retirement really work to support you. The age pension, concessions and the superannuation system. They are all yours to use and benefit from, if you take the time to understand and leverage them.

4. Really prioritise your health. I hate to use fear as the motivator, but the reality is, if you don’t look after your health before you retire, you’ll not only find it harder to get back in shape when you retire. You will also be likely to spend 10-12 years of your life, at the end, in poor health. And that’s no way to live.

Especially when the science of modern healthy ageing tells us what we can do to live longer, healthier, better quality lives. It tells us that if we do regular exercise, eat a natural, mediterranean style diet, build up our lean muscle mass, and get our preventive health checks regularly, to stave off chronic disease, that we will live longer.

5. Adapt your work to fit your lifestyle goals. As we start to see retirement in our future, maybe 10 years away, many people find themselves wanting to shift the role work plays in their lives. It is no longer a race up the career ladder. In your second half, work plays three important roles – it gives us money to spend on day-to-day life, it gives us money to save for our retirement years and it provides a powerful social framework, particularly if we love what we do.

In reality, you don’t have to retire fully until you no longer want to work. You can just keep adapting the work you do to better fit the life you want to live in the second half.

6. Stop and take a big hard look at your banking. When you get close to paying down your mortgage you suddenly become one of the most undesirable customers of the big banks. And yet, that’s when you need a bank to give you great interest rates on your cash. Your sense of loyalty to your bank might tell you that they’ll look after you later in life, but in reality, banks make their money of home lending and retirees don’t take out 25-30 year mortgages. You’ll probably have to look to the smaller banks for your high interest accounts.

7. Tidy up your credit cards. The other thing people don’t tell you is that you’ll probably never be able to adjust your credit card again after you retire because banks don’t really rate casual employment or retirement income as a legitimate source of income for credit risk purposes. So if you need to adjust it, or you are in a couple and relying on one card between you, know that can cause you problems later, when one of you inevitably dies first. So make sure you stop and re-evaluate your credit card needs before you start shifting away from the big fulltime paycheque.

And that’s my top seven. The list really is longer, so please let me know what’s on yours. And come and have a listen to my new podcast, Prime Time with Bec Wilson, where we talk all about what we can do to live longer, better quality and more financially secure lives in the second half.

Bec Wilson, author of bestselling book, How to Have an Epic Retirement. She writes a weekly newsletter at epicretirement.net.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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