Can you 'test drive' your retirement?
Written on the 28 July 2021 by Parkside InvestorPlus
When it comes to retirement, it's probably fair to say that there are two main camps of people those looking forward to retiring and those dreading the thought of retiring.
Those looking forward to retiring might have a few (or many) grandiose plans such as:
The list goes on.
While those in the 'dread' camp typically have one thought - how am I going to survive retirement?
You see, once you retire, it's not that easy to 'unretire'.
Sure, you can continue working part time or take up volunteering, however, if your mindset was not fully ready for retirement, then regardless of your efforts to keeping yourself busy you will be undermined by your feelings of not wanting to be where you are now - in retirement.
Take retirement out for a 'test drive'
Even if you're in the group that's looking forward to their retirement, you could find that it's not all that it's cracked up to be when you do get there - the reality has not met the expectations.
Just as you might take a car for a test drive before deciding on buying it, why not take your retirement out for a test drive?
In a recent article I wrote about how to navigate your life in retirement, I briefly touched on setting a plan to ease into retirement - possibly by reducing the hours you work in the lead up to retirement.
However, that is not quite the same as test driving your retirement.
Find out what makes you happy BEFORE you retire
Test driving your retirement requires you to stop working for a period of time and in that time off, you simulate your retirement life.
I feel this is a very useful pre-retirement strategy. People often have the notion that they will be able to do all those things that make them happy when they retire.
The truth of it though is that you should not wait until you're retired to find what makes you happy, rather, begin that process by determining what truly makes you happy before committing to retirement.
Your aim should be to maximise your time during retirement through using your pre-retirement years to discover what you really want to do and what truly brings you joy and fulfillment.
Here are some pre-retirement actions you may want to consider.
Living in a new location
The notion of the "tree" or "sea" change might sound very appealing in your pre-retirement years, so why not try out that change to see if that is indeed appealing. You could try both - a sea and tree change and thanks to short term property rental channels such as Airbnb, this is now possible.
Making sure the retirement budget works for you
Approaching retirement, you will likely have a retirement budget.
And while that number makes sense on paper, how do you know it's work in practice?
Taking a month or two and living on your retirement budget is the best way to make sure that it works.
This way, you'll have confidence in knowing the expenditures and amounts you think you will use each month are correct, and remember, you'll still be working and bringing in an income.
Trialling a second career
Chances are that when you retire, you won't fully retire.
You may end up working as a mentor for your company or start an executive coaching business or engage in volunteer work or you may even go back to university or TAFE to learn a new career.
Whatever your aspirations are in retirement, trialling them in pre-retirement will help you figure out what's right for you.
Nothing is ever locked in stone, however, at least you'll have a good sense and feel for what works for you.
Getting to know your hobbies
Golf, gardening, DIY may not necessarily be on your list of hobbies in retirement.
So, don't wait until retirement to find out what activities appeal to you.
In your retirement test drive, you can explore activities that you may have never thought of - learning to sail, sculpting, art, the list goes on.
The key objective in taking your retirement out for a test drive is simple - you want to enter your retirement phase with a running start, and you want to maximise your enjoyment time in retirement rather than spending months or even years trying to figure out what you really want to do and what makes you happy.
At Parkside, we can help you align your aspirations and values with a financial plan so you can meet your retirement goals.
About: As advisers, we act as a fiduciary sitting on the same side of the table as our clients, providing peace of mind, greater control and visibility.