RANDS AND SENSE

If someone asks you whether you’re ready for retirement, it’s likely that your answer will hinge on whether you’ve made adequate financial preparation for it. But while this remains a crucial consideration, there’s so much more to think about.

Retirement is being redefined - from an ending to a new beginning, a time to pursue what is meaningful in your life and challenge mind, body and spirit.

When the concept of retirement came into being, workers typically spent one to two years in retirement.

Today this can extend to 30 to 35 years. While financial planners are quick to point out the financial repercussions of this, a more holistic approach to retirement planning also considers how to make good use of what could ultimately be a big chunk of your life.

In June, BDO ran retirement coaching workshops to inspire and inform people currently five to seven years from retirement, and encourage them to prepare for the next phase in their lives. Here are a few key takeaways from these sessions:

1. Pursue purpose

What we all need is “enough purpose to get up in the morning, enough money to sleep well at night”.

Lacking purpose has been linked to an increase in destructive habits and failing health. For some people, work defines their purpose and so retirement can create a troubling void.

So instead of retiring from work, retire to something: a purpose.

What that “something” is will depend on who you are, and what brings meaning to your life - so this can vary substantially from person to person.

Do some soul-searching - what are your natural motivators? Ask yourself:

  • What are the meaningful things that I want to do with my spare time?
  • What are the areas I want to make an impact on?
  • What are the relationships I want to work on?
  • What are the places and people I want to visit?

It can help to find a “retirementor” - someone who has done it before you who can inspire and advise you.

2. Balance vocation with vacation (golf gets boring)

For many, giving up work at retirement age may not be an option. (Even if you can afford to retire, the financial benefits of putting it off by a year or two can be significant.)

But there is a deeper issue here: the truth is, even if you are in a position to go on a permanent holiday, there are diminishing returns on leisure. It turns out that just like all work, all play makes Jill a dull girl.

Vacation needs to be balanced with vocation.

This isn’t to say that you shouldn’t quit your day job. But you can volunteer for a cause close to your heart, learn a new skill, develop a hobby, start a business or pursue a whole new mini-career. The important thing is to find the balance between vocation and vacation that works for you.

3. Relationships matter

The BDO retirement coaching workshops emphasised the importance of staying connected to the people who matter to you.

Keep this in mind when planning: while you may have long fantasised about moving to Hermanus and living on the beach, this may prove less charming if it means living far from the friends and family that you love most - so consider how you can keep connected. Loneliness is not fun.

At the other extreme, you don’t want to be emotionally dependent on your kids any more than you want to be financially dependent on them. There may be a limit to how much your grandchildren want to see you.

And lastly: for couples, the gap between the expectations of each partner can present a challenge to a happy and fulfilled retirement.

It’s entirely possible that your partner has completely different ideas as to what life after retirement should entail, and if this is the case you need to be aware of it. Communication - and lots of it - is critical.

4. It’s all about attitude

At 78, Deirdre Larkin took up running to combat osteoporosis. At 85, she’s a record-breaking marathon runner.

If this tells you anything, it’s that age is merely a number. So challenge yourself: try new things, stay curious, meet new people. Studies have shown that conditions like Alzheimer’s disease and dementia are accelerated without continued intellectual challenge from one’s 40s onward - so there’s an additional motivator, if you should need one.

Ultimately, retiring with purpose all comes down to attitude, and the first thing that has to go is the old idea that retirement means boredom, obsolescence and waiting around to die. It does mean a fresh start - but it’s up to you, and how you prepare, that will make all the difference.

Ricardo Teixeira is the chief operating officer at BDO Wealth Advisers.