EXCLUSIVE EXTRACT: The Golden Rules for a Successful, Fulfilling Retirement
This is an extract from The Golden Years: How to Plan a Happy & Financially Secure Retirement by financial advisers Jamie Nemtsas & Drew Meredith
Retirement, just like life, is what you make it. The ultimate intention of our book is to provide a framework – or, at the very least, some insights – for how you can ensure your retirement is everything you want it to be and more.
While money is important in retirement, it is not the only thing you should worry about. Money may be able to buy happiness, but only up to a point; the rest is up to you.
Everyone will have a different experience in retirement, and yours ultimately comes down to the expectations you set. In this chapter, we look at the many case studies and examples drawn from our decades of experience supporting Australians of all ages and distil these into our golden rules for a successful, fulfilling retirement.
Define success
Success in retirement is simple: find what brings you joy and spend more time doing that. Achieving this, however, is among the most difficult tasks you will face in your life.
Why? Because there is no simple recipe or ‘right answer’ that defines a successful retirement. Having $2 million in your bank account or being able to travel to Europe for three months every year may be one person’s definition of success. For someone else, however, this may sound exhausting and the last thing they would wish to do with their spare time.
As advisers who have seen hundreds of families and watched as clients and friends have transitioned through each life stage, our biggest lesson for you is to ensure that you redefine what success means to you. This is particularly difficult for those with successful careers and, unfortunately, it does not always happen overnight.
There is no number or dollar amount of assets that suits everyone. What truly matters is your ability to sleep well at night.
Don’t go it alone
Mental health is among the biggest challenges we face as a society. The stoic mindset that is instilled in many older generations, likely caused by the experiences of multiple recessions, means reaching out is even more difficult for those of you in retirement or your latter years.
Retirement is not the time to be too proud to speak up. Don’t go it alone in retirement. Now is the time to be building new friend- ships and finding new hobbies with all that new-found time. Never be afraid to ask for help, as it is entirely natural to find yourself struggling for meaning during such a significant period of your life.
This also extends into the financial side of things, which you may expect to become less complicated once you retire. The taxation and super system in Australia is complex, and obtaining professional advice on key decisions – whether about downsizing, investing or tax – can make sure one bad decision doesn’t devastate your retirement.
Ignore the Joneses
‘June and Philip have such a nice car; how can they afford that even though we did the same job for the last 30 years?’
In retirement, you can do anything you want – you have complete flexibility. So, don’t get stuck on what others are doing. Don’t worry that your neighbour has a bigger house, boat or jet ski. Enjoy what you have and find joy in the small things.
The ‘Instagram’ or ‘Facebook’ effect is well known – we only ever talk or post about the good things happening in our lives, not the bad. So ignore what the Joneses are posting and move forward with your life.
Nowhere is this more relevant than when it comes to invest- ments, with retirement naturally meaning more BBQ and golf-club discussions around the next hot stock or investment idea. The boom in cryptocurrency speculation in 2020 was evidence of this. If your assets are generating enough income to meet your lifestyle needs, then who cares what everyone else is doing?
Bounce back
They say that the definition of resilience is the way in which you bounce back from setbacks or challenges that you face during your life. These challenges don’t stop once you decide to retire; in fact, they tend to be more impactful. Life will constantly throw curveballs at you, with health and friendships often being the biggest areas of stress. On a darker note, retirement is a period in which you will all too regularly farewell long-term friends and family.
Looking at this from a financial perspective, things will always go wrong, but that’s okay. Even the most successful fund managers get at least four out of every ten decisions wrong, but they still manage to deliver strong long-term returns for their investors. The key in both life and investing is to ensure that you don’t compound challenging events by making the wrong decisions during period of heightened emotions.
Don’t worry about money
All too often we hear stories about Peter or Greg at the local golf club being distraught because he has seen the price of X share fall during the day, or because Telstra has announced a cut to its dividend. Don’t let this be you.
Retirement shouldn’t be about tracking your investments every day or worrying about whether you will have enough dividends to pay for your groceries tomorrow. Money is a means to an end. It is a reward for your exertion across your career and should be used to enjoy experiences.
Use money to control your time, whether by outsourcing mundane tasks or simply enjoying the ability to do what you want, when you want. Don’t let money control you; being controlled by your money can be the biggest drag on happiness.
Find your why
Anyone reading this book who was born after 1990 might be sick of hearing about Simon Sinek and his oft-quoted advice to ‘find your why’. Unfortunately, he is right. You need to find your why; otherwise, the passing days will feel like an eternity.
Ask yourself, what are the things that bring you the most joy and engagement? It could be your children, or hiking, or travel, or cooking. If you don’t know yet, that’s also okay. How do you find it? Do you need to get out of your comfort zone and give some new things a try?
Bored of your partner’s cooking? Take a pastry course. Want to build something? Look into woodworking. It could be as simple as trying to spend more time with your family, in which case, where you live will be central to this. Just don’t fall into the routine of doing things that others want of you and not what brings your joy.
Become a bookworm
There is no better time than retirement to educate yourself. Now is not the time to rest on the laurels of your career or a lifetime in the workforce. Keeping your mind active in retirement has proven key to staving off dementia and ultimately lengthening your life.
Encouraging a healthy and inquisitive brain is essential to a long and successful retirement, but be wary of fixating too much on one thing. Too often we meet people who become obsessed with investments and trading, in many cases to their detriment. While a healthy interest in investments is a clear positive, don’t let it rule your waking hours.
Think about trying a different newspaper or learning a new language. Maybe it’s time to switch from non-fiction to fiction. Walk around a bookshop and buy some random books. You will be surprised by what you learn.
Take the stairs
While the benefits of being fit in your forties reverberate all the way into retirement, it is never too late to start. Ignore the posters of shredded 70-year-olds – this is simply unattainable to most people – and just stay active.
Always take the stairs. In retirement, your health should be your focus, as without it your ability to do the things you enjoy will be reduced substantially. It is more important than ever to take your health and diet seriously. Now is the time to get out and about more. Join those walking or fitness clubs, and find forms of exercise that you enjoy and that suit your schedule. Similarly, be wary of the long lunches and extra bottles of wine, and always make your regular check-ups with your doctor.
Discipline your way to success
It can take as long as two months for a behaviour to become a habit. Discipline is the way to success in retirement. Routine is central to good habits and supports strong mental health both before and during retirement.
Your need to work, commute and network helps build routine during your working life, but once this ends your routine naturally goes out the window. You don’t need to plan every minute of every day, but simply consider locking in a few things every week that bring you structure. Having a schedule will allow you to maintain control of your own time. It will help to ensure that you don’t fall into the ‘bad routine’ trap where your availability means that your movements are driven by others rather than by your own decisions. During quiet times, there is nothing more important than having something to look forward to.
Think beyond the grave
These final two rules are closely intertwined. Retirement is ultimately the time to focus on your legacy. It is normal to start thinking differently and bigger in retirement about what you want to leave to your family, friends and the world around you.
Legacy provides a true source of meaning to many, and getting your legacy right is all about engaging with your family and friends early. Is it financially driven? Does it have to be? Is it more about sharing skills, time or love with the next generation? Imparting knowledge and wisdom can be far more powerful than any inheri- tance or gift you are able to leave. This leads to our final note: ultimately, family is what truly matters.
Is life about the journey, or the destination? It’s actually about the company and people you meet along the way.
You don’t need to have children to have a family. Retirement is the time to spend meaningful periods with the people you love, put long-held grudges aside and look towards the future.
This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances.
