By Chris Castles
There are only two types of retirement – one where you outlast your money, and the other where your money outlasts you. Which one do you want?
Before I answer that question it’s probably worthwhile just looking at what retirement really means. If we go back 10 or 20 years, retirement was probably about getting out of the workforce and taking it easy. The age of 65 seemed to be the magic number. Fast forward to today and we have retirement, semi-retirement, consulting, community service to name a few. So what really is retirement. Well, because retirement means so many different things to different people, we use the definition that ‘it’s that time you have (or want) the choice to what you want when you want’. So it’s got nothing to do with stopping work, leaving the workforce or anything else you want to call retirement. It’s when you have the choice.
So bearing that in mind, I find it interesting that when we talk to people about their ideal retirement they often come up with ‘I don’t really know what I need, what do others our age live on? We don’t spend much’. Some have heard of the ASFA Retirement Standard and ask how much that is and plan around that. So, if you’re a couple living in Queensland and you want a comfortable standard of living you’ll need about $59,000 a year. If you’re happy being modest then $34,400 will be enough. How does that sound?
Considering ‘retirement’ will often last for 20 to 30 years or more, the answer to this question is really central to having a great life. So, you can plan for the ASFA Retirement Standard if you like, but wouldn’t it be better to imagine the lifestyle you want when you have the choice, and plan for that? Wouldn’t it be better to live your life rather than being ‘modest’ or ‘comfortable’?
If that’s what you’d prefer then taking the time to define the life you want to live can produce fantastic rewards. A lot of people can tell you want they don’t want to do in retirement, not many have invested the time to describe what they really want to do. So, do you want to run with the pack, or do you want to live a life by design?
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