Over the last 20 years I have dealt with a large number of clients who have transferred from their full time working life to retirement. If there is one piece of advice I can give anyone who may be preparing for retirement it is this: It’s not just about the money!
Don’t be fooled by the glossy ads you see on TV or in the papers of retirees playing golf, walking hand in hand in the park, sitting in a fishing boat, sitting on a plane travelling the world and living happily ever after. The reality can be completely different.
For many people, especially people who have worked hard with full days and those who dedicated themselves to their work life for decades there can be a sense of grief, or a void which cannot be replaced in retirement. The main source of self-esteem for many individuals comes from a days’ work, with the satisfying rewards being a pay packet, a project achieved or gains made. For many this daily challenge is the drive which gets them out of bed each day and tired at night. In reality, they do not want to retire completely, they just want to reduce their workload!
In the majority of these cases our firm has dealt with, the soon-to-be retired clients will have sufficient financial means to live the rest of their days. However, it is the non-financial issues which need to be addressed well before that day comes. Some of the important points to prepare for include:
- What are you going to do with your time? Travel, golf & fishing may only fill part of the working void and/or may lose the “novelty value” quickly;
- Is it possible to come up with an arrangement where you “retire gradually” or reduce the labour you contribute to your business each year? We see some great results under this arrangement especially in relation to farming families. In some cases we have clients who are 15 years into their “5 year” retirement plan;
- For husbands and wives who have worked separately for decades, is it possible to live together all day every day? Will you get in each other’s way?
- For farmers who are considering moving into town and have lived on a farm for the majority of their life, this move can be a massive change. Some will miss the open spaces and their privacy;
The best results we see are where the retirement planning process has been an ongoing process for many years. This gives the retiree the chance to gradually get used to the idea of working less and weaning themselves away from their business whilst at the same time still being involved with management (with the next generation – if applicable). It is essential that a sense of achievement, self-worth and valued contribution can be still be maintained. This can be a win-win for both generations if worked through properly.
The worst results we see are where the retirement process is not planned and not well discussed between family members – the danger being some family members assume they know what others want without finding out from them. As always, communication and open discussion is the key.
Yes – the financial side is important, of course it is, but it should never be the main focus when discussing the next phase of a working family’s life. Just make sure you consider everything and PLAN EARLY!