Plans for retirement

Garry and I are slowly working through our retirement plans. While there’s still work to do, our vision for the years ahead is slowly coming into focus. Since selling the business in July, we’ve been busy on several fronts.

First, I recently completed an online retirement planning course. Over six weeks, this training brought me up to speed on Australia’s pension system, transitioning your superannuation for retirement, retirement investment planning, healthy ageing, Australia’s aged care system and retirement travel planning. While much of the course covered familiar ground, a few gems have reshaped some of my thinking and the planning I'd already done.

For example, the course has made me rethink my investment strategy for my Superannuation. The course highlighted that with more than two decades of life ahead, I should invest some of my funds as if I were a forty-year-old with twenty years left before I need to use them. In other words, a riskier profile for a portion of my investment is prudent, at least for the next five to ten years. As the course explained, it's enough time to ride the inevitable economic highs and lows, recover and maintain a higher average return on investment over time. I’ve now built a new investment planning model that I’ll review with our financial planner later this month.

Likewise, the course talked about travel planning as you age. A key takeaway for me included the 10-10-5 approach. That is, after retiring, you have ten years with the capacity, passion and energy for more adventurous and demanding travel, such as an overland safari in Africa. You'll then transition into another ten years of less demanding travel to easier destinations, cruises and organised tours. Basically, travel where others handle most of the planning and heavy lifting. Then finally, the last five years involve staying close to home, doing less physically demanding travel as our health and mobility decline.

Second, we’ve spent time building and refining an annual household budget to see what we can afford to spend, along with a long-term (lifetime) investment and spending plan to carry us through the next 20-25 years of retired life. This has been an interesting exercise. I’m relieved to say we think we can maintain our current lifestyle with only a few modest tweaks. Of course, we need to have the right investment strategy for our retirement portfolio to grow our savings over time. That’s the one piece of the puzzle we can’t control. I think it’ll take me a while to get comfortable with the open risk this represents.

Third, we've started making plans to renovate the apartment next year. This includes refurbishing the bathrooms, replacing the kitchen, reflooring the entire house and replacing the wardrobes. If we have the time and money, we'll also redo the staircase, replace the blinds and install a permanent home office set-up under the stairs. In support of this goal, we recently visited the Home Show, a trade show held twice a year in Darling Harbour.  We think we've already found wooden flooring we both like.

Finally, following on from my retirement training course, we’ve been working through our travel vision. We’ve decided that for the next decade or so we’ll plan at least one major overseas holiday annually, plus an overseas beach vacation for Garry and maybe one domestic journey during Summer. We seem to have settled on a compromise for the beach holidays. We'll spend time ticking off more of the Pacific Islands, plus a few far-flung destinations like the Maldives, Thailand and Vietnam. In support of this goal, we’ve already booked a vacation in the Solomon Islands. I’ll share more in a separate post.

We’ve also mapped out a draft 10-10-5 of bucket list destinations. As a result, we now have a plan of attack for our travel adventures for the next decade or two. However, which destination gets ticked off first depends on the special deals that pop up from time to time. If all goes as planned, Garry and I hope to finish with a final tally of more than 115 countries and territories ticked off our dance card. Watch this space!