I’m in Hawaii at the moment, doing something I really enjoy – people watching – in between snorkelling, surfing and seeing the local sights.
As you’d expect at this time of year, our fellow hotel guests are predominantly older couples or young couples with no kids. Stereotypically, it should be the young ones out in the surf and the older generation beside the pool on a sun lounger. In fact, it’s often the reverse. I really am sharing the beaches and the waves with the original “silver surfers”!
I’m pretty certain that if I asked the younger people here about their perceptions of retirement, some classic “life after 65” myths would result. So I’ve decided to bust these myths right now, before my own surfing lesson…
Before you retire, you need to have at least £xxxxxx in your pension
What you need to retire is what’s right for the lifestyle you want to lead in retirement for the next 30+ years. There is no set figure.
When clients come to me, their retirement funds and pension pots fall into just three categories:
- Not enough for what they want to do
- Just enough to get by
- More than enough
You’d be surprised how many people actually have more than enough for what they want to do, when we consider total wealth. It’s also important to remember that the amount you retire with is not static. Even in the slowest of economies, investments will grow. Pensions can be left untouched if not needed. Many retirees continue working because they want to (see last myth on this list).
The secret is to know what you have, what you need and why you want it. More in my blog below:
The Purpose of Money is NOT just to make more of it
Myth #1: You can’t retire before the state pension age
As the recent riots on France illustrate, people can fixate on the state pension age as an absolute. In reality, you can retire at whatever age you wish. As the DWP website explains:
“You can keep working after you reach State Pension age. ‘Default retirement age’ (a forced retirement age of 65) no longer exists.”
You can’t actually claim your state pension until the official pension age which is currently 66 for both men and women. This will rise to age 67 at some point between 2026-2028. So, keep working if you wish, go part-time, leave your existing job for a new one, whatever you want.
Want to know how much state pension you’ll receive? Use this online calculator
Myth #2: I have lots to do, I will be busy
Many people retire with a loooong list of DIY and other things they need to do (and their partner wants done as well!). This may look like a lot compared with what you can get done now, but it is essentially a list of tasks. Once it’s done, it’s done.
Instead of a task list, I encourage clients to make a ‘bucket list’ of everything they would like to do, from a special cruise (naturally) to learning a language. Unless what you want to do has a real and genuine purpose for you, it becomes just a way of filling time. Check out my blog on this below:
Keeping busy: What does retirement mean to you?
Myth #3: I will have to reduce my spending in retirement
As I said before, it’s all about how much you will need to live the lifestyle you want in retirement. Your spending habits will definitely change, but that doesn’t mean they have to reduce.
If you set a budget for what you want to achieve during a year, including the leisure budget I discussed in my last blog, this helps focus your mind on what you really want to do, and what would just be “nice to do”.
Your yearly leisure budget: use it or lose it
Myth #4: Retirement means the end of work
Absolutely not, as discussed above! It may signal the end of your full-time employment, but it doesn’t mean a cliff-edge jump from 9 to 5 work to 24/7 leisure.
Many retirees opt for tapering away from full time work by reducing their hours at their current employers, perhaps also moving into specialist roles that use their skills better. Others may leave their current employer and work elsewhere in a less stressful or demanding role that supplements their income.
My plan is to be able to work from anywhere. Typing this sitting on a beach in Hawaii is starting to make that plan become a reality. So just think, what do you really want to do and where?
The Great Unretirement: back to work for pensioners
Myth #5: People work in retirement because they need the money
Work is so much more than just an income provider. You still need a reason to get up in the morning. Work provides a social network, a structure to your week, the opportunity to keep your business brain active, to pass on your skills to a future generation.
Odd though it may sound, time spent at work is also breathing space for you and your retired or part-time partner. After all, you may not have spent so much time together during daylight hours, ever!
Easing in gently: the benefits of semi-retirement
What’s next?
In future blogs, I’ll be discussing more about the seven core elements of living a purposeful retirement, and how you can create your own balanced retirement plan. If you’d like to get cracking on your own plan, contact me for details of my individual or couple retirement coaching sessions, and start planning now.
