Retirement planning: What does retiring successfully mean to you?

We know that the landscape of retirement is changing, and the idea of ‘slowing down’ is not necessarily a reality, or even part of the plan for everyone.

We spoke to a number of different people about what they choose to prioritise in order to feel like they’re creating a successful retirement for themselves.

Patricia Edgar, author, TV producer and scholar, says, “slowing down is an unhelpful concept, as is the notion that retirement means sitting in the sun having a cup of tea and a sleep. The body and brain demand movement and challenge.”

Patricia says that because people are living longer, the retirement landscape and what we consider to be ‘middle age,' have changed significantly.

“Fifty is the beginning of the second half of life, as living to 100 is becoming well within reach,” she says. “We have to redefine life stages and change our models of work, living and caring. Flexibility and adaptation are key.”

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The stats

When looking at the stats surrounding retirement in Australia, it's been found that most people retiring in the next few years will rely partially or substantially on the Age Pension for some or all of their retirement, due to inadequate super savings.

While the gender gap is closing, women still lag behind substantially when it comes to average [super] account balances at all ages. This is due to a multitude of reasons – from the gender pay gap, to the fact that a woman may take a break from full-time work (and therefore earning an income and contributing to her super) to have and raise kids.

It's also worth noting that there is still a significant proportion of the population who do not have any superannuation, with around one in four men and one in three women reporting they have no superannuation savings whatsoever.

Do you feel like you're going to end up in the same boat? Or are you taking steps to prepare and feel a bit more in control of your finances as you head into later life?

Active planning

In speaking to a number of different people who were either planning their own retirement, or had seen others transitioning into their later years, one thing was clear – active planning is key, but often forgotten.

“There is more awareness from a financial perspective about the need to plan early for retirement, but from a whole-of-life sense, there’s definitely not as much active planning as there should be,” says Sandy Hutchison, Founder and CEO of Career Money Life. “People often aren’t given the time they need to really think about what their retirement might look like.”

“They don’t call retirement the golden years for nothing!” says Sandy. “It’s definitely something to be excited by, but as we’re living longer, it’s even more critical that we plan well in advance, and not just from a financial perspective.”

As Where 2 Now’s Jill Weeks says, successful retirement is something that looks different to everyone, depending on your priorities and where you’re at financially and in your working life.

“Successful retirees often don’t treat retirement as a destination, but as a chance to do different things. It’s a change of gears,” she says. “A ‘portfolio lifestyle’ in retirement is important. Elements may include part-time work, mentoring, consulting, hobbies, volunteering, sport, travel, family and friends, and socialising. Having a balanced portfolio – where not too much time and effort is spent in one section of the portfolio – may be preferable.”

In the thick of it

For those living in their 50s and 60s at the moment, it’s clear that what retirement means to them is something different to that of their parents.

“To my parents, retirement meant giving up work completely,” says Martin, who is 60 years old and working in the insurance industry. “To me, it means working on a part-time basis, probably doing something different from my original job. Doing something to keep me occupied, with the option to earn some money to prolong my savings.”

His wife, Suzanne, who is 57 years old and working in the wine industry, says much the same. “These days, retirement is a less defined concept with people living longer and with higher expectations for leisure time pursuits,” she says.

The couple also recognise that planning for their later years is really a balancing act between a number of different things – and many of these stem from financial stability.

“As a couple we are trying to plan the financial side to retirement as best we can, so that we can enjoy spending time with family and good friends, many of whom live a significant plane ride away,” says Suzanne. “Everyone always says they wished they had started the process of financial planning sooner – it’s true! Unfortunately as life goes by, the years seem to speed up and, all of a sudden, although we don’t want to hear it, we have become the ‘grey economy’.”

Growing your retirement income

There's no denying there can be a fear of ‘running out of money' as we head into retirement. But there are ways to grow and stretch our retirement income, so the money in the pot lasts as long as possible.

While these aren't necessarily right for everyone, ASIC's Money Smart  offers five tips to help grow your retirement income.

1.   Get advice as early as you can – asking a financial adviser for help with investment strategies and ways to navigate our complex tax system, will help you understand the potential risks and returns you can expect.

2.   Diversify your investments – if you have money to invest, you could consider spreading your investments across multiple assets including shares and property to help meet your income needs.

3.   Manage your spending – while you might be no stranger to budgeting, it's important to reassess the way you're spending your money as your income changes in retirement, so you get an idea of where you may need to cut back.

4.   Take advantage of your entitlements – this includes everything from understanding the senior concessions available to you, to researching other grants and benefits you may be entitled to, as you settle into retirement.

5.   Keep on working – if you're not ready to transition into full-time retirement, continuing to hold onto part-time employment – if this is possible for you and/or your spouse – can help to extend your retirement funds.

What is your definition of success?

“A successful retirement, just like a successful life, is one that is personally fulfilling and satisfying to the individual,” says Sandy. “There’s no ‘perfect mix’. As long as it makes you happy and you can afford to support yourself, then it should be considered a resounding success.”

When considering your own retirement, and what success might look like for you, Patricia has a great piece of advice to consider that sums up all the different things you might be juggling.

“Look after yourself, exercise sensibly, eat regularly and nutritiously,” she says. “Make sure you keep your friends and make time for them. Have a laugh; consider others and they will consider you. Don’t worry about ageing and how you look.”

After hearing these words of wisdom, are you ready to get planning?

Australian Pensioners Insurance Agency Pty Limited ABN 14 099 650 996 is an authorised representative of AAI Limited ABN 48 005 297 807, the product issuer. Limits, exclusions and conditions apply. Read the Product Disclosure Statement  before buying this insurance. Go to apia.com.au for a copy. The Target Market Determination  is also available. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. 

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