Retirement Reinvented: A Fresh Perspective on Life After Work

Practically, I believe that this term should be removed from our lexicon. So maybe we need to start there. What does the term ’retirement’ mean?

Retirement, as a noun, is ‘the action or fact of leaving one’s job and ceasing to work.’

From the Oxford Dictionary – thanks Google.

This is pretty much how we all see it. It is a point in our lives after which we will no longer work and our livelihood will be funded from our investments. For most people this is not your reality based purely on longevity-risk. This is the risk of out-living your investments – you run out of money to fund your lifestyle.

So, lets change and stop talking about retirement and rather talk about a career change from working for someone else and working for oneself. And if you have always worked for yourself then the likelihood is you will continue to do exactly that until such time as you stop working entirely due to ill-health or death.

What your ‘post-work career -PWC’ looks like is up to you to create and curate. My use of the word curate is the most important as it imposes a great onus on all of us to be proactive and earnest in creating your PWC.

Too often there is no active engagement on what your PWC will look like or what it will even contain. What will you be doing now that you are no longer working full time. Can you even afford to STOP working full time?

For most of us this is not going to be possible. If you were to suddenly stop working and draw your current salary from your investments, how long would they last.

If you do not have that in an investment at age 55, then you can’t retire in the old way of defining this. However, if you consider what a PWC could look like then maybe you can stop actively chasing your existing career and try something else using your existing investments but decreasing your costs or creating an income another way.

One fault that is often made is when people see their home as an investment to liquidate to provide for them in retirement. This is not possible as Where are you going to live? What about that monthly cost to rent? Is that in your monthly budget? Also downscaling is not possible, really, are you really going to move to a low-cost flat after living in a beautiful home in the suburbs. Not likely, in reality, sure you may downscale the size of your property, but the capital cost will be similar. If you are also thinking of moving to the coast, then realise that your cost to buy down there is a lot more.

And if you are moving to the middle of nowhere. That is lovely and if you have done your monthly budget projections and investment analysis thereon. Then you have done the work, and this is a moot point!

Now before I have those investment analysts shouting about compounding of money and returns on investments over long run etc… Yes, you can build wealth over the long run, but this doesn’t help someone to realise the reality of what retirement may have to look like.

That we are all going to still be actively creating income our entire life. Be this in managing your investments – properties or businesses OR still working in some way. Either by turning a hobby into a business (eg: servicing or repairing vehicles) or by selling things (passionate about baking or cooking etc…) or maybe even being a consultant or coach and mentor. Whatever this may look like, especially if you are a professional, there will be a source of income for you way later in your career, or after formal employment.

I see this as a positive. With age comes maturity and an ability to create, passionately that can encourage those around us to do the same. With proper planning and guidance, you can do this if you are willing to see things as they are and make plans around them.

Too often I have conversations with clients that are not willing to accept the reality of where they find themselves and in so doing, miss opportunities to do something about this by allowing time to work for them. Be this in creating these other sources of income and in so doing growing their wealth.

To bring in a point that I have earlier around investments and compounding thereon. By using time to compound your investments and create wealth, you build capacity for yourself later in life. And the earlier you start the better, even if you only have 5 to 10 years. This can be as simple as understanding your costs, minimising these, so that you can maximise your investable income. It also allows you to get a handle on your budget for when your income does become uncertain due to you having left full-time employment. One of your greatest assets is your ability to create income. This is far greater than any investment and will always be your best way to ensure your wealth and health. In my opinion investing in side-hustles or businesses that can supplement your income once your formal work ends is imperative. And note this can also be a property portfolio or similar income generating pursuit. There is nothing passive about managing investment properties.

A side conversation to have is how businesses should really remove retirement ages. Understanding that they do want to create space for younger employees but is that necessary? Institutional knowledge is powerful in businesses, as can be seen in the dearth of true artisans in today’s job markets. Anyway, that is another conversation and not one to expand on here.

The driving point here is that I do not believe any of us will truly retire in the way that we all have been made to understand. It is also an extremely seminal moment in your life when you choose to change your direction and look to a PWC. I see it as taking control of your future and one that you should start having long before the time comes to make it happen. If you can have these tough conversations with yourself, you will be in an empowered space to create a future that is yours.

We work hard to curate this life that we live. It doesn’t stop the moment we leave formal employment or are ‘retired’ sue to a specific age in a business’s rules. Often this is also a case of being at a time in one’s life that you are not ready to stop being productive and serving those around you. Seeing this as an opportunity enables a conversation based on sense of purpose and drive rather than one of dread and fear. Being open to it and engaging on it ensures that it will be a time of your life in which you thrive.

Please reach out to us if you want to discuss any of these points that are raised herein. Our purpose as an advisory firm is to provide a platform to engage on all aspects of one’s financial life. Hence why we raise these points for discussion and engagement. Something we love doing and look forward to the opportunity!

Yours,

Duncan & Team