Most long term relationships have their share of communication black spots. You learn to navigate around them, sharing day-to-day life comfortably but avoiding the issues that you suspect are likely to cause conflict or discomfort.
Then suddenly the concept of retirement looms. Someone asks you outright “Are you planning to retire soon?” or worse still “So what are your retirement plans?” Mild panic! What to respond? You mutter something generic then go away and find your mind is running riot with thoughts of how you are going to spend the next phase of your life. Do we have enough money? Will we travel? Where will we live? What do we want out of life? And perhaps the biggest (often unspoken) question of all….How can each of us make sure we are choosing a life that will make us content?
Whilst it might be easier to live within your comfort zone, not bringing up these issues for discussion, the reality is that you need to come to some agreement on them. The sooner you know the direction you are going the sooner you will be able to start taking steps to get to where you want to be.
If you have been working with a financial planner, or already have a strong understanding of your financial situation and the strategies you are using to achieve your financial goals, then this won’t be an issue.
However if you haven’t been communicating about your overall financial situation then it is vital that you do so. Once you stop your income-producing work your nest-egg suddenly takes on a huge new role in your life. For some it will be large enough to provide your living costs, but the majority of Australians are going to be challenged to live the life they’d like in retirement.
According to accountancy giant Deloitte, Australian males aged 60 – 65 have, on average, a superannuation balance of $114,000, while women of the same age average $94,000. This is frightening when you consider that for a basic comfortable retirement lifestyle men will need around $340,000 and women $370,000.
What will you need as a couple to live the life you’d like? Do you need to find a way to improve your finances or to change your expectations?
Do you know when you want to retire? Do you share goals about this, or is timing going to be an issue? What impact does the timing of your retirement have on your tax commitments for that year?
If one of you wants to retire earlier than the other, how will you manage the lifestyle changes? Will your everyday roles and responsibilities change? This might sound basic but, let’s face it, it is often the little things that get us down. If one person in the relationship has always been the one who did the grocery shopping or the house cleaning, is that still how it should be? Habits are hard to change, but we are talking about a major change in your lives now and the beginning of a whole new chapter, so everything is open to new practices.
Where you choose to live is closely related to the previous two issues. Your money will obviously dictate the level of housing you can consider. Your timing will dictate whether you make a move at all, and when it suits you to move.
But beyond those issues are the big questions of how you want to live. Are you going to stay where you currently live, or will you move to a different town or area? Do you want a free standing home, an apartment or some other form of housing? Would you like to live in an “over 55s” complex? How important is it to have family and friends close by? If you chose to move to be near family and friends, will they still be there in 5 years? Can you really afford the sort of home that you want?
Many couples share interests and that makes planning your retirement activities quite easy. You can enjoy doing more of the same together.
But what about the many couples who don’t have interests in common? They can have happily co-existed for years, respectful of the other person’s interests but not remotely keen to be involved. Time and money are the two problems here. If someone is passionate about a hobby they are likely to view the time and money spent on that hobby to be perfectly justifiable. Their partner, who doesn’t share the passion, can easily resent both the time and money. That’s a BIG conversation!
We have started working together in a hybrid lifestyle retirement business. We want the great lifestyle. But we also don’t want to use up all our savings in the first few years of our ‘retirement’ from our previous work. Both of us love learning new things, meeting new people and challenging ourselves. So we now have this hybrid life of freedom from employment, but we are still working where and when it suits us, building our business. For two people who don’t have a lot of interests in common this is certainly giving us a lot to talk about and the chance to use our completely different but complementary skills.
When people are planning to retire, the first thing they often think about is that they will have free time, the freedom to do the things they have always wanted to do. For many people this means travel. Where to go? What to do? How to do it? Travel brings up so many possibilities but if you are travelling together there are likely to be compromises. Would you both enjoy going on a cruise? What about being a grey nomad? What level of luxury do you require? Would you like to travel a lot in less luxury, or just a little but in more comfort? I hope this is a series of conversations that brings you lots of pleasure.
BoomersNextStep.com will be examining these issues to help you to start planning to retire and to live a truly fulfilling retirement lifestyle that meets the needs of both you and your partner.