For many of us dreams of retirement include visions of finally having the time to do all those things we’ve never had the time to do. But did you ever imagine your ‘retirement’ planning might include a way to finally embark on a business idea you are passionate about?
Linda Fitzhardinge is an empowerment coach at the organisation Women Building Wealth. She gives women financial advice and encourages them to take an holistic approach to their health, wealth and spirit – and says all three elements are closely inter-related.
Fitzhardinge says there are times when she has met with a client to discuss her retirement plans and the session has ended in tears because dreams do not align with financial reality.
But instead of focussing on the negatives of such a realisation, Fitzhardinge has been working with older women to draw out their ideas for earning income from ideas they are passionate about. So while it might not be possible to completely stop work at 55 (an age when many women would like to retire, Fitzhardinge says), at least she might be able to reduce her hours at work and transition into a role that excites her. Fitzhardinge says often these roles aren’t as lucrative as the salaries women have enjoyed earlier in their career, but they provide a top-up to income into retirement, and can be merged with lifestyle as much as possible.
As part of this strategy, Fitzhardinge works with women to add skills development into their financial plan so they can begin to build the skills they will need in their new ‘passion’ career.
She has developed a roadmap to help people keep focussed on ways of building superannuation savings through each decade (of course, long-term planning is another way to avoid the dreams/reality divide).
In your 20s: Maximise any job benefits like medical insurance and life insurance through super; become an habitual saver; ensure you maximise any government handouts like super co-contribution and first home buyers grants; strive for a debt-free life, for example, by not going into debt on consumer goods; remember the further away you are from retirement, the more acceptable it is to take on risk (because over many decades markets are more likely to recover from any downturns) so consider taking advantage of your time in the market.
In your 30s: Keep saving; invest across various asset classes and risk categories; keep “good” debt (that is, money you have borrowed to invest in appreciating assets) in control; ensure adequate insurance coverage – life, health, assets; continue contributing to super even if you’re a stay at home mum via your spouse’s super.
In your 40s: Set specific retirement income goals by doing a complete financial snapshot of current financial assets and liabilities; get professional help to clarify how to make the most of the remaining working years; consider developing second and third career paths for your 50s and 60s by educating yourself now (through industry or university courses or adult education centres); maintain all relevant insurances regardless of costs or other financial pressures.
In your 50s: Revisit and revise your retirement income goals; take advantage of any higher superannuation contribution levels that can be made; review insurance levels and adjust to match your debt risks; begin looking at commencing second and third career paths so you can attain some level of seniority and higher pay status.
In your 60s: Begin moderating your spending strategies to match retirement income levels that you’ve set; investigate superannuation payout options (lump sum, part pension); enquire about government assistance and when it can be accessed (and know the triggers to gain these benefits).
Whatever you plan to do in retirement, it always helps to have some kind of plan. Have you got a ‘passion career idea’ up your sleeve to take you into your 60s?