Life’s Transitions: In Your 60s
So you’ve hit 60 – who’s excited? Retirement is just moments away. Many a noble person before you have taken these same steps, which is why you can learn from others and try to improve your situation for a better future.
There’s the expected freak-out as you question if you have enough money for your future. All the papers say that you need at least $1 million, and your $257,000 isn’t close. How will you survive? Should you work longer? Will your employer allow you to stay longer? Can you keep doing this work longer? Will you qualify for the Age Pension? Will the Age Pension still be around as long as you need it, and will it be enough? It’s definitely a time for questions.
There is also a fear of leaving the workforce. It’s what you’ve all done all of your life, so just to finish can be daunting. Who you are can easily be wrapped up in what you do, and no longer doing anything can leave a hole in some people’s lives and identities. Who are you if you’re not the doctor, lawyer, teacher, or nurse you have been your entire working life?
Another question that many should be asking themselves before retirement, but many think of after retirement, is what you’ll actually do in retirement. What to fill the days up with can be a challenge. If you haven’t planned properly, you can quickly get bored, lonely or even feel like a burden to others. Partners who have previously had their own life in early retirement feel imposed upon them now that their partner is home with them 24/7. My mother often said to my father, “I married you for better or worse, but not for lunch”, and it’s true we all need to find our purpose and what we will be doing in Phase 3, as some of our clients call it.
Another consideration is your kids are having kids, and with childcare so expensive and hard to get into, those in their 60s who have retired are often automatically thought of as ‘free babysitters who have nothing else to do’. Next thing you know, those retirement plans are postponed while it seems you have a second go at raising some kids (although this time around, you’re a lot less strict on the no lollies or ice cream rules).
Medical concerns also increase at this age. Keeping hit and healthy can be a challenge. Modern medicine has meant that we are living longer and surviving more illnesses, but our rate of contracting an illness seems to continue to increase.
Senior cards are available, giving discounts on various things like medication and health care but understanding what cards give you what benefits can be confusing. Even who provides what cards and what applications you need to complete is a mind field.
There is a lot to consider, and with retirement right around the corner or in your initial years of relaxation, you need to plan well and be able to stick to it.
To help you get started, reach out to the JBS Financial team here AND here are some tips to help you get the most out of your 60s; see below.
Six Point Check List
See a financial planner.
While you may have seen an adviser earlier to get an idea of what your retirement will look like, you definitely need to check in again to determine exactly when you can retire and how long your money will last. Don’t just think that the magic age is 65. Retirement can be at any age and should be based on what you want in your future, the wealth you have behind you to support yourself and when you actually want to retire. As a minimum, you need to review your retirement figures and determine if you have enough to retire on.
Set a realistic retirement date
If you don’t want to retire, then don’t. Just because you’ve got enough money doesn’t mean you have to; it’s if you want to, make sure you have enough money to support yourself. Getting a job when you’re 75, as you’ve run out of money, might not be that easy.
Plan for retirement
Start to think about what you’ll do in retirement. Get a hobby, buy an old car to restore, plan some holidays, book in at some golf clubs, just make sure that you have long-term plans and don’t just do everything in the first month.
Don’t forget that retirement is 20 years plus
Don’t forget that you have a really long time frame for your retirement. This means that you shouldn’t just automatically take all your money out of super once you retire or put it all into cash holdings. Becoming a more conservative investor is inevitable for most retirees as they cannot replace any downturn in their investment value by working but also realise that your money has to last you a long term and keep pace with inflation. Just keeping money in cash may not be the most appropriate use of your money to ensure you can fund your entire retirement. Remember, you are investing for the rest of your life; you need to make the most of it.
Pensions are tax-free
When you hold money in pension accounts (converted from superannuation money) and are over age 60, these assets are held tax-free. This means there’s no tax on any income earnt in the fund or growth in the investment value. There’s also no tax when you take money out of your pension, and after you meet a condition of release, like age 65, you have full access to the funds. You can set a pension to pay you regularly, so you continue to receive an income like you did a wage. This helps to keep you on track so that you don’t overspend in retirement. This could be an option for your money through retirement; however, you should consider all options before implementing anything.
Don’t rely on Centrelink
There is this common misconception that as you’ve paid taxes throughout your working life that you get to receive the Age Pension to fund your retirement. This is not necessarily the case. Your eligibility to receive the Age pension will depend on a number of things, like your age, assets, income money or assets you’ve given away along the way, inheritances and a number of other things. You may qualify to receive it and therefore you may have to rely on your own money to cover your retirement expenses.