Learning from experience
Some people enjoy retirement more than for others – and one of the secrets to success is to start planning well in advance. We spoke with a 67-year-old who has begun his (semi) retirement with style, for his real-life tips on how to make your retirement dreams happen.
Ewan Brown couldn’t be happier with his retirement, partly because he’s not yet fully retired. The 67-year-old knows that in order to have a full life he must remain active in a number of pursuits including hobbies, fitness and family. Through a combination of paid and volunteer positions, he also makes sure he’s working two to three days a week.
The most powerful tool Ewan has in his retirement is choice, which has been a benefit of being actively and passionately involved in his superannuation planning with his financial adviser from his 40s onwards. This helped him understand the basics for maintaining financial independence – including how and where his money was placed, and the tricks for tax-effective investing.
Thanks to a solid financial plan, Ewan is able to cherry-pick jobs and volunteer roles and choose what suits him. He decides how much time he’d like to spend working and how much he needs to keep free for his favourite hobby – fishing. And if a particular job doesn’t meet his expectations, as was recently the case, then he has the freedom to search for a new one.
Ewan’s latest role is a directorship with the Council on the Ageing ACT (COTA ACT), an industry body representing the interests of older people in the ACT. This gives Ewan the opportunity to spread the word about planning a happy, healthy and wealthy retirement. Here are some of the things he’s learned along the way.
Accumulating wealth: age 40 to 49
At this stage of life, according to Ewan, you’re likely at the peak of your earning capacity, so your mortgage is less of a drag on your income. During this stage of life, individuals and couples often finally have a little more cash at their disposal. Deciding on what to do with this extra wealth, he says, is key to success later in life.
“It is very important at this stage to resist the temptation to overspend, rather than to save,” Ewan said. “You’re likely reaching a cusp with some of your debts, so it’s important to start ramping up your saving capacity."
“The tendency is usually to spend because you’re finding you have better cash flow. But this is the perfect time to start making use of the tax system by looking at the benefits of superannuation with a financial adviser. Finding out what tax-effective investment methods are available to you is the first step in planning for your retirement.”
If you’re already receiving professional advice and being disciplined with your savings, this shouldn’t mean cutting back on your lifestyle – particularly if you picture yourself enjoying these little luxuries after your retirement. During these years, Ewan regularly rewarded himself with holidays and nights out at restaurants.
“While you do have to find that balance and be steeled to making saving a part of your life, don’t be afraid to then take advantage of your current situation, rather than saying, ‘I’m going to leave it all to my retirement,’” he recommended. “A lot of people who do that never achieve anything. They never get to realise their goals because they fail to set themselves up for a retirement lifestyle.”
Ewan said that during this period he always had some form of personal insurance – particularly when it also offered tax benefits – to protect his retirement strategy from unforeseen events.
Before retiring: age 50 to 65
It was early in this stage of life that Ewan and his partner began planning the physical side of their retirement. They designed and built a house that was shaped around their life together as they became older, rather than one that included children at home.
“This was a deliberate action, to design and build a home that was suitable for a couple,” Ewan said. “We didn’t want a McMansion; we wanted a place for retirement. And we don’t see it as our forever home, there is knowledge that there will have to be another move as we age, but it certainly suits our purposes during the first stage of our retirement.”
Planning your retirement in the level of detail it deserves can take up to five years to achieve. That’s why it’s much better to begin the process well before you retire, with the assistance of a professional financial adviser.
“I started doing things that other people would usually put off until retirement, such as tidying up all of my finances, documenting important information, knowing what you’ve got and making sure there is adequate insurance coverage,” Ewan said.
“I had heard a lot of people say, ‘I’ll get around to that when I retire’, then when they retired they were so busy doing the little things that they couldn’t organise or enjoy any of the big things. People then experience less choice, and they can lose their identity during the early stages of retirement. They feel they no longer have a purpose. But if you retire on your own terms and under your own control, then you hold on to your sense of importance.”
Retiring: over 65
Planning doesn’t end once retirement begins. Ewan said retirement is a series of steps and must be planned as such. He recommended considering that your life will be lived in five-year stages, then figuring out what you’d like each to look like. That way, you can prepare accordingly, working closely with a financial adviser.
Outside of work and volunteer roles, one of Ewan’s highest priorities is fitness. He runs and visits the gym, and believes staying active is vital to the enjoyment of retirement, particularly its early stages. The first five to ten years of retirement are typically the ones with all of the travel and adventure and after that things tend to slow down.
“After the first ten years, retirement activity and expenses begin phasing off as we move through other stages until we’re looking at advanced life-care planning and what sort of nursing homes we’d like to go into,” he said.
And Ewan believes that the key to a prosperous retirement is to never stop doing things.
“Volunteer in the community, keep learning and stay fit and active,” he said.
“Don’t stop work immediately; it is too much of a jolt. Build networks, make contacts and always keep an eye on the future in case something new comes up. The baby boomers were brought up to think we were owed a great retirement, but that’s not correct. You have to work at retirement to make it fulfilling.”
Important information: This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non‑guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.
Count Wealth Accountants® is the business name of Count. Count advisers are authorised representatives of Count. Information in this document is based on both current and proposed regulatory requirements and laws as at 3 April 2019, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.
Count is registered with the Tax Practitioners Board as a Registered Tax (Financial) Adviser. However your authorised representative may not be a Registered Tax Agent. Consequently, tax considerations are general in nature and do not include an assessment of your overall tax position. You should seek tax advice from a Registered Tax Agent.