Where do you see yourself in your retirement? Is it on the golf course, getting the garden in order, playing with your grandchildren – or maybe it’s scuba diving in Borneo or cruising in Antarctica? What would you do with an extra 2,000 hours a year?
The fact is, we’re all living longer and today’s retirees can look forward to enjoying two to three decades of life after work. We’re also fitter and more active than previous generations – retirement is not what it once was.
According to the Central Statistics Office, the number of people aged 65 is set to reach more than one million by 2030. While one in nine never intend to retire, 56 per cent expect to be 65 or older when they do. The whole conversation around retirement is transforming as a result. Rather than a hard deadline, after which you’re put out to pasture, it’s becoming an era full of freedom and possibility.
Whether it’s travel or learning a new skill, spending more time with family or doing something completely different through volunteering or part-time work, retirement is no longer an ending. It’s the beginning of something new – your second life – and it can be filled with excitement and opportunity.
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“Retirement wasn’t always viewed in the most positive light – people thought they had to stop work and sit around all day,” says Sinead McEvoy, head of retirement solutions at life savings company Standard Life. “But we are all living longer, healthier lives now – 60 or 65 is considered very young.”
Undoubtedly, the whole idea of retirement can be somewhat overwhelming. Research carried out by Standard Life suggests that two out of five people in Ireland feel scared or anxious thinking about retirement, and fewer than one-third have a plan in place. Many of us have negative ideas of what retirement looks like, but by reframing those thoughts and getting prepared, it can be something to look forward to.
The fundamental concept of retirement is evolving, McEvoy says, and financial advisers are keen that those approaching retirement age think about it as a new era, not something that’s cause for apprehension. Being financially prepared is only one aspect of living a rich and fulfilling retirement, she adds. “We all need social connection, we all need to be mentally stimulated and have a sense of purpose. We all want to do something and we all need a reason to get up every day.”
Of course, financial planning and advice tend to be top of the list when it comes to retirement but as Standard Life’s head of distribution, Alan McCarthy, explains, people should have a broader view of what their retirement looks like. A good retirement is about more than having money in the bank. Along with being financially prepared, you’ve got to be socially and mindset-ready too.
“Traditionally, we always look at the finance side of things – that’s what takes up 99 per cent of the conversation,” McCarthy says. “Don’t get me wrong, the finance side is absolutely vital; you have to have the resources to meet your basic needs – ‘your heating and your eating’ as, I call it – and also lifestyle and discretionary spending, such as entertainment and travel.
“We realise now there are three pillars to this. If you just focus on the financial aspect of retirement, what we’ve seen from our research is that’s where people run into difficulty. They reach that milestone and retire, and then wake up on a Tuesday morning in November when it’s raining thinking, ‘Oh, what am I going to do now’?”
Even just having a chat with loved ones can get you thinking about what exactly your days will look like after retirement. “It’s just a different door into a different part of your adult life, and you need to think about what you want to get out of that,” McCarthy says. “We would always encourage people at the early stages to talk to your family, talk to your partner, talk to your friends.”
Not sure where to start? Take a look at the Standard Life Retirement Hub at standardlife.ie, which is full of practical tips and tools to help you create the future you want. The handy Second Life Questionnaire will help you identify what’s important to you, what you might be excited about – and what you might not yet have even considered when it comes to retirement.
Designed to get you thinking about your dream second life, it will allow you to focus your priorities and start those conversations with your loved ones and your financial adviser. You might even be surprised at what ideas it unlocks.
“We ask people, you’ve got so much more newfound extra time every year now – what are you going to do with it?” McCarthy says. “They’ve been working for 40 years; of course that’s overwhelming, but the time to think about it is before you retire. How are you going to live a healthy, purposeful life as you age?”
As McCarthy notes, taking care of your physical and mental health is a vital part of making the most of your retirement. Think of your health as your real wealth. Be proactive about it, look after it, invest in it, and you’ll enjoy the benefits. Staying physically active is essential for keeping you fit and mobile but it can also be enriched by making choices that add an all-important social connection too. Things like joining a walking group, an exercise class or taking up a sociable sport such as golf or tennis. The health benefits of exercise are well documented, and spending time in the company of others will also work to boost your overall sense of wellbeing.
Prioritising keeping your brain active, as well as your body, is another non-negotiable and it’s all the more important at this stage in life. The transition into retirement can be a challenging time, and the departure from workplaces, long-time colleagues and having a focus every day requires adjustment at first. It’s essential to nurture a sense of purpose in this new phase of your life, and luckily this is less of a challenge than it might have been in previous years.
For most, it’s all about striking a balance, McCarthy says. “The most successful retirements are enjoyed by the people who almost take a mini-retirement, phasing in and out of work, or taking on some freelance work,” he explains. “It’s not necessarily about stopping – it might be slowing down or it might be doing things at a different pace.”
McEvoy agrees. “Retirement looks so different now,” she says, “Most people tend to cut their working week down gradually, going from four days to three days to two over a number of years. This helps them adjust to a different pace and also focus on some of their other passions.”
Understandably, many of us put thinking about our retirement on the long finger. It can seem very far into the future – and 2,000 extra hours a year is a lot to consider – but a little forward planning now can pay dividends. McCarthy suggests that those who are edging towards retirement age – even people in their 40s and 50s – have conversations with their financial advisers on all aspects of what their second life might look like.
“We have better outcomes when we get advice – simple as,” he says. “The adviser isn’t just there to tell you about features and benefits of products or about investment return, they’re also there to help you with the bigger issues around retirement. They know that good retirements inevitably mean a solid financial foundation but also strong social connections and purposeful engagement, someone who is prepared from a mindset point of view.”
Rather than making firm decisions now for years down the line, think of it more as sketching out a rough idea of what you’ll want when the time comes. “Having even a loose plan is good – it can evolve, but it’s just thinking about having that good retired life that you deserve,” McEvoy says.
After all, knowledge is power and building a scaffolding now for the future can ease much of the anxiety you might have about retiring. Which also means it’ll be a lot easier to get excited about your retirement plan – something the Standard Life team see often with their clients.
“They don’t see it as the end or giving up; they realise they just have more options now. It’s more of a redirection in their lives and it’s a time to enjoy themselves – they are off the clock, there is less pressure,” McEvoy says. “We meet people who have had high-powered, demanding jobs all their lives, and now they are living life at their own pace, volunteering, working part-time or returning to education and absolutely loving it.”
The retirement playbook needs to be rewritten. It’s no longer about sitting back or stepping aside. This is your time, a chance to live it your way. With solid financial advice and some smart lifestyle planning, you’ll enjoy your second life on your own terms.
For more information on planning your retirement visit Standard Life
