COVID has heightened many of the usual considerations when retirement planning, so it’s worth revisiting your goals and strategy.
There is no denying that our world has changed over the past two years and many of these changes are likely to be enduring. The COVID pandemic has touched almost every aspect of our lives. From how we work and socialise to our core values.
For many, retirement planning has been impacted as well. How we think and plan for retirement as well as how we bring those plans to life.
As we emerge into this next stage of living with COVID, it’s worth revisiting your retirement planning goals and strategy. Here are some key areas you should (re)consider in your retirement planning.
Aligning plans with changing values
During the COVID pandemic, many of us found that our values were shifting. Amongst our clients, we saw people gaining an appreciation of true work-life balance. They were enjoying more time with people they love and some were moving out of cities. Some even realised that their career choice wasn’t their passion and wanted to make a change.
When it comes to retirement planning, it’s important to consider whether your lifestyle needs have changed here too. For example, lockdowns and border closures have meant that while you always thought retirement would be about a sea or tree change, now you want to be closer to family.
Whatever has changed for you, it’s important to reflect these changes in your retirement planning. That way, you can be sure to achieve the lifestyle you want and deserve.
Structuring your super for future uncertainties
Structuring your super should always be on your financial planning agenda, but the value of this has been reinforced over the course of the pandemic.
The swift impact on the stockmarket in early 2020 led many to consider moving superannuation into cash and those that did simply locked in losses.
The good news is that there are ways to structure your super to weather financial storms, and it’s never too late to make changes.
Working for longer may be more viable
Transition to retirement (TTR) strategies, whereby you work for longer in a reduced capacity, have long been an option. However, with today’s sharp increase in flexible and remote working, there are more opportunities across more industries. These include going part-time or permanently working from home.
These options can allow you to work for longer. You can continue to build your retirement savings and keeping your hand in, while starting to slow down.
This can be a good strategy for emotional reasons as well as financial ones, so it is well worth considering.
The emotional transition is almost as important as the financial one
Many of us dream of the big-ticket things we will do in retirement, but don’t consider the everyday lifestyle we’ll lead. It can be a shock to suddenly find yourself with more time than you ever had before.
For many retirees, there can also be an identity shift and a sense of changed status. In the workplace, we have a clearly defined role and are often part of a hierarchy. Over time, this forms part of who we are. When we retire, this identity suddenly disappears, which can prove a significant adjustment.
It’s critical to think about what your everyday life will look like. How will you fill the 8-12 hours you used to spend getting ready for, going to and unwinding from work? Considering your daily lifestyle has always been an important aspect of retirement planning, but its importance has been heightened by the pandemic.
Lockdowns and restrictions took many of the social, family and travel aspects away from daily life – and although we hope these are coming to an end, none of us can predict the future. It’s important to think about what you like to do and the smaller, everyday things you enjoy.
You may like to consider setting some solo goals that you can work on, such as reading those books you never found time for, getting the garden in order, or building your fitness.
This is an edited version of an article that originally appeared on Apt Wealth Partners and is republished here with permission. This article contains general information only. This should not be relied on as independent finance or tax advice. If you are after specific professional advice, speak to your registered tax agent/financial advisor or reach out to Apt Wealth Partners.
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