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My Best Way to Retire is …

I am often asked the best way to retire.  It’s not an easy answer because everyone is different in terms of their dreams, personal situation and money.  However, I can tell you with genuine insight how I personally am approaching and dealing with retirement.  I’m in the second half of my sixties and so far, so good.  This is how I’ve handled it so far.

The first thing I did was not to sit back, do nothing and let it just happen to me.  I started thinking seriously about it around 10 years ago.  I thought about it a lot and actually visualised what I wanted my retirement to look like, and feel like.  I practised what I preach.  That is, to be able to enjoy my retirement on my terms requires some fair dinkum planning.

A question I get asked a lot is …. “If you are retired, why are you still working?”

My answer is that I hate golf, I am a lousy fisherman and I don’t want to haul a caravan around Australia.

When I thought about my own retirement, I thought about three (3) things:

  1. Purpose
  2. Health; and
  3. Money

 

Health

The way I see it, without good health I won’t be enjoying retirement on my terms.  The money will play a different role.  It will be financing medical costs and life extension rather than the life I had planned.  So when I wake up each day, it is not money or purpose I am thinking about.  It is maintaining good health.  Because it is only with good health that I can make the rest of it work.   I confess right here that I haven’t been anywhere near perfect or disciplined about this over my life and, as so often is the case, I got a big wake-up call recently, which fortunately I survived.  Fortunately, it wasn’t a heart attack or a stroke but only because I am a believer in regular medical check ups and the signs were detected early.  It was two things.  The first was 5 years of Atrial Fibrillation for which I eventually had two catheter ablations.  The second was a deteriorating aortic valve which resulted in an open heart valve transplant last year.  After all of that, I lost weight, reduced the lifestyle risks and am making the most of my new lease on life.  I consider myself very fortunate to get another go at good health so it remains my top priority.

Purpose

I struggled with this for a while because I wanted to do something worthwhile and self-satisfying.  I’m a bit of a home-body but not 24/7.  I do like to travel, so does my wife.  At the other extreme, I didn’t want to be on holidays forever nor do I want to hang out with old farts, comparing health problems and medications.  I think that is the fastest way to meet the grim reaper.  I know not everyone likes their job but I do.  I actually like being a financial adviser because it helps people, and after all these years I have gotten really good at it.  So why give it up?  The solution for me is to work part time and leave plenty of time for coffees, travel and socialising.  There is no rule that says retirement must be devoid of all work, or that money can’t be earned along the way.  The way I see is that it’s nothing more than a new and evolving phase of my life cycle and I can structure it any way I like.  Besides, if I am working, I am not annoying my wife and she is free to enjoy her retirement in a way that best suits her.  Also I think flexibility is the key here.  If I find something more than work that I am more passionate about, trust me I will quit working and start doing that.  I most certainly don’t view retirement as a homogeneous journey.  For me, I want it to be a time of fulfillment as well as a time of new experiences.

Money

Money is certainly important but not my top priority.  There are many ways to get money and it really doesn’t matter how, provided that it’s legal.  In my view, the main purpose of money is to provide choices throughout retirement, such as accommodation, standard of living, travel and fun; then in later years (much later hopefully), to pay for medical expenses, aged care and a funeral.  Money doesn’t buy health or purpose.  It also doesn’t buy a happy marriage or replace a lifetime partner or lost friends.  For me, my biggest retirement goal as far as money is concerned was to be debt free before cutting back on work and allowing myself to think ‘retirement’.  Without debt, I can live very cheaply if I want to; and importantly I can conserve money that might be needed later if health and mobility deteriorate.  Of course, out of all the different types of personal debt, the home mortgage is the one that takes the longest time to whittle away.  But credit card debt and personal loans etc also have to go.  In retirement, carrying debt is like dragging an anchor.   It will strip away retirement savings in no time, which can make the later years of retirement downright miserable.  My second priority is to try to be as tax-free as possible.  Of course this is impossible while I am still working part time but access to superannuation benefits after age 60 (with conditions) and after age 65 (without conditions) certainly helps the cause.  In the end, everyone in retirement needs some form of income to live so in that sense, paying tax if necessary is generally a good financial sign.

So there you have it.  That is my take on retirement.  What you do will be different to me, but the process of planning it should start early.  The reason I say that is while there is plenty of time to contemplate your retirement purpose, you might want to start getting a grip on your health before you get the frightening wake up call; and you might want to start saving and buying some investments that can help with the retirement cause later on.  The issue isn’t whether you utilise or trust superannuation or not.  Superannuation for all its complex rules and government tinkering is just a tax concession, nothing more.  The main game here is you taking action early enough to squirrel away some money and assets for later on.   The challenge is to do it when you have so much else on.

Call me if you want a chat.  All I charge for a first meeting is a cup of coffee.   I am much more interested in getting to know you and your circumstances; and figuring out how I can help you, rather than what I can sell you.

Cheers

Gary

 

Retirement – Making the Most of the Last Lap

Retirement is generally regarded as quitting full time work somewhere in our 60’s, and starting a new phase of life without having to trudge off to a daily shift at the salt mine.

Although retirement can last 20 or 30 years, it is the last lap because there is only one outcome at the end of it.   We don’t get any younger; the body starts to fail and at some point we die.

So broadly speaking, retirement has two (2) phases which are often blurred and overlap.

  • The early part is enjoying a new-found freedom and having fun.
  • The later part is the drawing near to life’s end

The early fun part often requires part time work and some budgeting so that money doesn’t run out.  The later end of life part always needs some serious planning to make sure that (a) any time spent in failing health or aged care runs as smoothly as possible; and (b) we don’t leave a mess behind after death for our kids to clean up.

In my case, I am 66 and for me retirement is pretty good at the moment.  I survived a serious heart problem last year and now I run my business part time from home.  I am healthy and relaxed. I spend time with family and friends; and I work at my own pace.  That would be at enjoyable pace rather than high speed, high stress pace of the past.  I see fewer clients than I used do and they have to be a little more patient sometimes because they find me away on a holiday occasionally, whereas two years ago that would never happen.  Work is now fun and it keeps my brain active.  I feel I could do this for at least another decade; and I will if I can because I love what I do.  I am very good at it and I know I can make life so much easier for others.

So here I am at the start of my retirement, and I am very mindful of the deterioration of health and end of life that is somewhere ahead.  So here is my top ten (10) checklist to make sure that my own affairs are in order:

  1. Get debt free, my number one priority as it is a lot less expensive to live debt free in retirement.
  2. Boost super as much as is affordable.  The government constantly screws with it but it is still the best tax concession saving we have.
  3. Live as tax free as possible.  Superannuation pensions and the Age pension (Centrelink) help this cause, while income producing assets outside super (e.g. shares and rental properties) tend to work against this cause but if you are happy to pay tax then it’s fine.  Every situation is different so it is a matter of structuring for the best result.
  4. Review personal insurances.  Is all of it still needed?  Typically, it gets hellishly expensive as we get older.
  5. Check insurances in your super fund.  You are paying for it even if you think you aren’t, and they are also age-based premiums.
  6. Review your Self Managed Super Fund.  Is it still appropriate in old age?  Do you have a plan for it?  So many SMSFs perform poorly and there is no mercy from the ATO for ageing trustees.  Additionally, there are some real benefits for older people to transfer back to retail super (depends on your situation though).
  7. What to do with your business?  Business owners need to make decisions about what to do with theirbusiness and the company or trust that owns it.  Will it be a family succession or will it be an external sale?  While succession continues your legacy and helps the family, proceeds from a sale can attract a big capital gains tax concession if you transfer it to super.
  8. Plan for mental health deterioration.  We all need to have someone we trust beside us to make decisions and sign on our behalf (i.e. Enduring Powers of Attorney and Medical Directives).
  9. Plan for aged care.  Nobody wants to go there but in the event that it becomes necessary, have a plan and tell the kids well in advance so that the decisions are yours, not theirs.
  10. Organise your Estate.  This is an area that two thirds of Australian adults ignore which is silly because your family then has to deal with the Public Trustee, which can be an excruciatingly long, frustrating and expensive process.  For most of us estate planning is so much more than a will because a will only covers assets in your own name (only).  Separate arrangements must be made for super, companies and trusts.  The idea is to make your instructions clear through your will, your super nominations and other post death instruction documents.  Also be aware that you can put extra protections in place for a disabled beneficiary; and extra protections in place for yourself against a problem beneficiary (e.g. a child with a marital, gambling, drug or spendthrift problem).

So there it is.  My message to you is get this stuff done, find a purpose in life, and have an enjoyable retirement with a lot less to worry about.  Call me anytime to discuss because nothing I have outlined here is straight forward.

Cheers

Gary

 

 

 

 

 

 

 

old man wearing a beret holding a glass of wine

The Golden Years Retirement Myth

Business coaching BrisbaneIn the words of Tennessee Williams, “You can be young without money, but you can’t be old without it”.   Retirement is often referred to as the golden years, but for many a golden years retirement is a myth, and not just because of a lack of money.

There are four (4) must-have requirements that must be met before retirement is likely to approach a golden era.  They are:

  1. Must have good health
  2. Must have enough money
  3. Must have satisfying relationships; and
  4. Must have a continuing sense of purpose

Regardless of the amount of money you have, poor health can devastate your retirement if it occurs in the early stages.  It can also make it much more expensive than it needs to be.  The irony is that in many cases, poor health can be the result of the decades spent under stress to earn the money to fund a life, including retirement.

The financial reality for most people is that they exist on a full or part government age pension.  Even if all the other requirements are met, a lack of money can mean a frugal lifestyle indeed plus a severe restriction on travel and other touted ‘golden year’ activities.

Loneliness can have a severe negative impact on the quality of a person’s retirement. Having one or more satisfying relationships is essential because all people have an innate need for social interaction and support.  The key relationship might not be a spouse; it could be one or more close friendships.

One essential requirement that is overlooked by eager retirees is an ongoing sense of purpose.  After a year or two of travelling overseas, or touring the country in a caravan, the reality of nothingness often sets in.  If you don’t like fishing, golf or bowls, life can become extremely boring.  For this reason, many people go back to work or give their time to charities.

Retirement is a period that can last for 30 years or more.  So if you do some golden years planning that great, but remember that money is only part of the plan.  If, like most people, you don’t plan, at least you know what’s coming.

Gary

Why plan your business exit?

#1 business consultancy Australia

Business exit planning specialist

Ten (10) great reasons to plan your business exit are:

  1. To protect the most valuable asset you own
  2. To leave on your own terms
  3. To second guess the unexpected
  4. To make your business sale-ready
  5. To attract the buyer you want at the price you want
  6. To secure the sale or succession arrangements you want
  7. To be eligible for the small business CGT concessions
  8. To secure your retirement
  9. To bequeath your wealth in a fair and protected manner
  10. To keep the family business in the family until you decide otherwise

If you value the business asset that you have spent half a lifetime building, then nurture, protect it and allow it to work harder for you.

For quality business planning

Call Gary on 0408 756 531 or email gary@garyweigh.com

Could you finance 30 years retirement?

Whether we are employed or business building or both, we all face the same problem.  That is, how to finance that period of our lives from so-called ‘retirement age’ to the day we die.

For many, superannuation will only be part of the story.  For the majority of Australians approaching retirement age, work super will not be sufficient regardless of whether it is in an industry fund or a retail master trust.  Most who struggle with low super balances now would have still faced the same problem, albeit not so severe, even if the GFC hadn’t occurred.

Let’s face it!  The period of time in retirement these days could be 30 years or so.  Even a seemingly healthy $500,000 in superannuation is not likely to cut it over that time span.

We all need to accumulate enough income earning assets to see us through to the end of life.  That requires a pro-active approach to wealth building with sufficient lead time.  The alternative is to rely on work super and the age pension and hope for the best.

Those unable to be fully self funded retirees or who find the age pension inadequate, may have to keep working in some capacity, even on a part time basis to accommodate traditional retirement activities, such as travel and sightseeing.

Business owners might choose not to sell out so soon and stay longer in their businesses, perhaps decreasing their direct involvement.  Others might choose a sea-change, living and working in a different location, or a career change which could include running a home-based business, online or offline.

The point is that whatever the post-retirement strategy is, it has to be planned.  If a new career or business building are to be part of the retirement solution, common sense suggests that they should be planned and in place before existing income sources are terminated.

Designing a prosperous retirement

Business coaching Brisbane

As we live longer and work less, reliance on superannuation alone to provide an income in retirement looks increasingly bleak. Time spent in retirement or at least away from full time work could be up to 35 years.  For many people, time in retirement will equal or exceed time at work.  Financing such a time span will be an enormous challenge, even for the financially astute.

It is hard to imagine anyone being content to stay home for three decades or so.   Retirement should mean that work is replaced by enjoyment of life.  Committed time at work should be replaced by free time at home.  Regular employment income into the retiree household should be replaced by alternative income streams.

In retirement, discretionary spending can rise significantly.  It is a time for trips, holidays, pastimes and generally having fun.  Unfortunately, poor health and the need for aged care can add other significant layers of expense.

For most Australians, the traditional retirement income streams include a pension from a super fund, supplemented by the Age pension via Centrelink.  For the greater majority that won’t be enough.  It may be necessary to build other passive investments and to consider an active investment, such as a business.

However, older people need to be careful that a new business started later in life is not labour intensive.  Nor should it occupy every waking moment.  For those who want to travel as well, it needs to be flexible enough to operate from anywhere in the world.  Therefore, it must have a strong commitment to portable computer technology, instant online communication and internet marketing.

7 surprises to bring a thriving business undone

You wouldn’t be the first business owner to believe that running a business somehow negates your need for personal financial planning; and that the growing equity in your business equity is the only superannuation plan you need.

You think that because you own a business, your retirement is completely taken care of.  You assume that your business will provide everything.  There is nothing more for you to do!   On all counts, nothing could be further from the truth.

Running a business is no more than a choice you make in how you earn your income.  Some choose business income; some choose employer income.  Either way, those who take a deeper interest in planning their personal and family financial wellbeing will prosper in the long term.

Furthermore, as a business owner there is an extra layer of planning you should be thinking about.  That is, planning the future of your income-earning and capital-appreciating asset, and protecting the equity in business that you work so hard to build up.

There is no guarantee that your business equity will translate into the retirement lump sum you hope for.  There are just a few of the things that could go wrong and derail your dream:

  1. Adverse circumstances (e.g. litigation, legislative change, customer desertion, obsolescence) force you to sell at a bad time
  2. Your health fails you before you reach your ideal ‘sell out & retire’ scenario
  3. Your business partner dies prematurely and his / her spouse becomes your new unwelcome business partner
  4. You want your children to inherit your business but they are not interested
  5. You don’t structure your business correctly to take advantage of the small business rollover rules
  6. You don’t have a Will to control the bequeathing of  your personal assets or your business ownership and / or control
  7. You have no emergency fund and no liquidity available should something major go wrong

Personal planning and business planning aren’t just esoteric concepts.  They are processes that help you predict, protect, or take advantage of the expected and unexpected things that life throws up.

How much email marketing is too much?

This is something I wrestle with personally.  At the moment I am busy promoting my new online MyProsperityForum site.  My target market is risk insurance (i.e. life insurance & income protection) advisers, financial planners and home loan professionals.  I am also about to start a keyword and social media campaign to drive traffic directly to the site.

But back to the email issue!  I am emailing other financial professionals to let them know what a great resource this innovative forum is for them personally as well as the enormous benefits for their clients.

Whilst I don’t want to send emails too often, I do want them to know the benefits of using and referring their clients to the forum.  But how much is too much?

I am reasonably well known in the financial planning and business coaching Brisbane communities so I don’t want my emails relegated to the spam box.   That outcome will only serve to tarnish my good reputation.

But I do want to get my messages across.  For example:

  • Non-financial planning financial advisers are regularly asked questions outside their field of expertise.  MyProsperityForum is a perfect solution.
  • Some people, even clients of financial planners, are personal finance DIYs who are very interested in understanding the many tricky financial planning concepts as they apply to both individuals and business owners.  MyProsperityForum is the ideal solution and a service option not available or offered in the past
  • Many people can’t afford to or are reluctant to consult a financial planner.  Again, MyProsperityForum is a perfect solution
  • A lot of people simply want to ask questions of a knowledgeable professional without any obligation or product push.  There is also a lot of value at MyProsperityForum in seeing what other people ask.
  • People want difficult financial concepts (e.g. personal risk insurance, investment, superannuation, retirement, estate planning) explained in plain English.  MyProsperityForum already has such content uploaded in easy-to-read article form

You must check out this website!

Check it out!

MyProsperityForum is one of the most innovative websites ever.  If you are interested in your own prosperity, you can join the forum and ask questions about anything to do with personal finances or business planning.  This includes budgets, debt, investment, insurance, superannuation, retirement, insurance, or even starting a business income.

The beauty of this forum is there is not the usual product push or pressure to fork out money for a financial plan.  It is a safe place to find out how to get ahead financially; and there is always a financial planning expert on hand to answer your questions and guide you.  This site is perfect if you’re a DIY, don’t want to spend lots of money, or if you just want to learn to be better with money.  There is even a private message service if you want to ask a silly question.

There are heaps of great articles already posted in the forum.  To name just a few:

  • The ugly truth about ‘no medicals’ life insurance
  • Improve your personal finances – 10 ways to get started
  • The power of a good risk insurance adviser
  • Putting money away for the kids
  • My top 10 tips for a prosperous retirement

Just in case you don’t get enough value from having a financial expert to yourself and reading the plain English articles, there is also a 220-page e-book called “Recession Riches and Wealth”.

I strongly recommend you check out this unique forum www.myprosperityforum.com