This is not another piece about retirement. Well, it is a little, but it is really about dreams and goals. Just as most things in financial planning are.
Your dreams of not just relaxing in front of the TV but also exploring new facets of life. Your goals of achieving financial freedom and enjoying a pretty good third age.
But the truth is that our lives in the third age vary as much as they do at any other time of our lives. This is partly because how your life shapes up in older age will depend a lot on the path you followed earlier in your life. This is what was found in recent research that examined the links between individual life histories and later life outcomes.
The same research found that if a person has access to greater financial resources and coaching throughout their lives, they will be able to access more social and cultural experiences – which helps to maintain physical and mental health in their third age.
Ken Dychtwald, PhD, founder & CEO at Age Wave and host of a public television special, Life's Third Age, explains the retirement concept very well in his publications.
Ken's interview with his close friend Maggie Kuhn, founder of Gray Panther is my all-time favourite.
Maggie was an American activist known for founding the Gray Panthers movement in 1970 after she was forced to retire from her job at the then-mandatory retirement age of 65.
In the 1978 interview, she told him: "We're the elders of the tribe, and the elders are charged with the tribe's survival and wellbeing. We who are older have enormous freedom to speak out, and equally great responsibility to take risks needed to heal and humanise our sick society. We can and should try new things and take on entirely new roles."
She went on to list what she thought were the most important of those roles: Testing new lifestyles, including living in more cooperative modes. Building new coalitions across ethnicities and economic conditions because age is universal. Serving as watchdogs of public bodies and guardians of the public interest. Monitoring corporate power and responsibility on behalf of workers and society. In short, using the power of wisdom and experience and attention to assess society, heal what ails it, and plan for its future. Maggie's challenge and agenda were and remain ambitious – but they seem to be even more relevant and needed today than when she outlined them decades ago.
Not much has changed since the 1970s in terms of people looking for a sense of purpose in their third life. So what should we do about it?
Put purpose at the core of your retirement strategy
Before going deeper into the topic, it pays to plan for your retirement as early as possible!
As individuals, we roll from one diverting story to the next, usually forgetting what we were obsessing about in the previous month. How do we know how much we should really care?
You may work with an accountant to help guide your money choices, but did you ever realise that there are retirement coaches that specialise in putting together a retirement strategy for your third life?
These retirement coaches are often qualified financial advisers who can help you navigate the complex and sometimes emotional choices in your financial life, along with the personal decisions faced at or near retirement. They allow you to view retirement not as an ending but as a transition into a new, exciting phase of life.
Utilise assets that support your goals
Although financial assets are about more than just money and investments, prudently managing cash flow allows you to build the financial wealth that provides greater freedom to build wealth in other ways as well, through relationships, experiences, and by serving others, that wouldn't otherwise be possible.
This is especially true for younger investors, as the decisions you make today will determine the wealth and freedom you will have for the rest of your life to support your goals.
Identify your ikigai
The Japanese define purpose with the concept of "ikigai." Ikigai is the intersection of what you love, what you are good at, what the world needs and what you can get paid for.
Maybe in retirement, you can have ikigai without getting paid, but it is still a powerful way of thinking about achieving meaning and purpose.
Advice and having a plan
In order to reap the benefits of extended life, you need to plan and to act upon that plan.
A financial adviser can model the scenarios we discussed in this article to a higher level of detail, accounting for all the constant variables in your life.
Having a financial plan will help you find clear actions to put you in the best possible financial position. If you know where you want to be, it can make getting there easier. And when a trusted adviser spells out what things need to be done, it is much easier to act confidently.
Nick Stewart is an Authorised Financial Advisers and CEO at Stewart Group, a Hawke's Bay-based CEFEX certified financial planning and advisory firm. Stewart Group provides personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver solutions.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz