The big challenge facing the 4 million baby boomers in Australia, as they head into retirement over the next 15yrs, is how to make their hard-earned money last for the rest of their lives. Our generation is living 20-30yrs longer than people 100yrs ago, when 50 was considered old and few people lived past 65yrs. It’s easy to make short-term plans for the initial ‘honeymoon’ period when you first retire, but many retirees haven’t really thought about their long-term plans, how they are going to fill the daily & weekly routine of everyday life, in between the trips away and how to budget for all that, for possibly another 20-30yrs.
Rather than constantly worrying about money, which can easily lead to stress and ill-health, let’s look at some ways to make our money last the length of our life, how to balance saving & spending, so that we can enjoy the freedom that life after full-time work brings.
*Start a MONEY DIET to maintain a sense of control over your life and spending habits. Look at how you can save $$$ on a daily/weekly basis. In retirement, what you do have, is more time to shop around for the best deals, whether it’s food shopping or larger items. From the age of 50, you can get a National Seniors card that offers all kinds of discounts. At 60, you are eligible for a State Govt Seniors card which entitles you to great discounts on public transport, cinemas, etc. I have met a number of people who are not aware of these cards and are missing out on some great savings. How often have I heard stories of people who spend up big on motor homes, sailing boats, 4-wheel drives early in retirement & then regret it. Hire or rent, before you commit to big expenses, especially if it is a new venture – try before you buy. You don’t want to chew up your assets and then suffer the consequences of living on less. Our life can be rich in different ways without spending money all the time. Simple things like less eating out less and having more picnics and home entertaining, with everyone contributing, can be fun and you are still socialising, while saving money. Walking, cycling, swimming, are some activities that keep us fit, get us out into nature, mixing with others and cost very little.
*Prioritise your NEEDS v WANTS. As people tighten their belts after the global crisis, we have to weigh up whether we can really afford, in the long-term, some of the things we want , but perhaps don’t really need. Unless you are going to use your caravan or sailing boat or 4-wheel drive regularly, would it be more cost effective to hire on the few occasions you want to use it? Those people making a sea or tree change, how big a place do you need if 80% of the time it may only be you, living there and the rest of the time the extra rooms are empty? As we get older, it becomes a time in our lives to let go of accumulating more & more material things, de-cluttering and enjoying a simpler lifestyle. I read in the paper recently that a millionaire in Vienna, Austria, is giving away his fortune of $5 million to charities and also his personal possessions because his wealth “never made me happy”. How many times do we hear that money doesn’t buy happiness? I firmly believe that valuing our health and relationships will give us a better quality of life than worrying constantly about money, which can lead to ill-health. Research is showing that some of the happiest places in the world are where people enjoy a strong community spirit & feel needed & valued.
“Hope represents our ability to look ahead and not dwell on the problems of the present.”
Start NOW to do some of the things you want to do in retirement – test the waters. This way you are staring to create a more realistic lifestyle plan and also developing a more realistic financial plan, so that you don’t put off your retirement any longer than you need to.