The ten biggest misconceptions around retirement
1. Retirement is a destination rather than a transition. Many Australians are clear on what they are retiring FROM, but not clear on what they are retiring TO. They often feel that retirement is this new life phase that is an extended holiday or a thirty-year long weekend”.
2. Retirement could be the longest single phase of your life. Again, picking up on the destination theme, people believe that this is a new life that is your third age. In fact, you will go through six to eight very distinct phases in your retirement, driven by either your health or the health of those you care about (spouse or partner).
It is a multi-phase journey. Also remember that time isn’t always your friend—getting older means doing as much as you can as quickly as you can (never put anything off!)
3. Retirement happiness is directly tied to how much money you have. In fact, good health is probably the biggest key to a successful retirement. Happiness in retirement is a function of having a positive outlook, engagement in life, nurturing relationships, life meaning and a sense of accomplishment.
4. Retirement spending will be the same throughout retirement. People tend to spend like drunken sailors in the first few years of retirement before settling into a pattern. As time goes forward, spending tends to move more to family and health. Travel patterns tend to move towards less stressful travel and almost no travel in later years.
5. 300 rounds of golf a year are always a good thing (if you like to golf). In retirement, as in life, too much of a good thing is often too much of a good thing.
6. A life that is full of leisure must also be a good thing. We like our holidays and weekends when we are working, therefore imagine if that were now your life. Consider the paradox of leisure: we like leisure because it is a break from work. If you had leisure seven days a week for thirty years, where is your break?
7. Retirement is a ‘couples’ issue. In fact, it is more likely to be a single woman’s issue. For example in Canada, the average age that a woman first becomes a widow (if she is going to be a widow) is 59. Sixty percent of women over age 65 are single, widowed or divorced.
8. The goal of financial planning for retirement is to “reach your number”. There are other financial issues that you will have to deal with during retirement such as creating a lifetime income strategy, tax issues and preserving your estate. And, financial planning doesn’t stop at retirement. Just because you have financial security doesn’t guarantee retirement success. You still have relationship problems, health issues, happiness and sadness.
9. You can put things off in retirement. In fact, you want to do as much as you can as quickly as you can. You never put anything off in retirement. Do it NOW and hope that you can do it for thirty-plus years!
10. Retirement is a time to do new things. It is, but as we age we actually have increased difficulty doing new things. Remember that you are who you are and that generally if you didn’t do it before retirement, you will be less likely to do it after retirement. Since the retired ‘you’ is no different than the working ‘you’, ask yourself whether you are comfortable doing new things now. If not, you will have to create the positive strategies to do new things rather than just assuming that the only variable is time.
