Why we all need a Plan B

Over the course of our careers we have met thousands of pre-retirees and retirees.  During that time, we have observed changing attitudes to retirement.

Today, most of us are planning on working longer; the average age we plan to retire is now 67.  And almost all of us want to transition into retirement, reducing our work hours over time.

But foresight may be vain.  According to the Australian Bureau of Statistics “Retirement and Retirement Intentions” research, in reality, the average age at retirement is around 55.

Most of us don’t get to choose the timing of our retirement.  It’s forced on us by circumstances and that’s why we all need a plan B.

Need for contingency

We are choosing to work longer and transition into retirement for a number of reasons. Sure, we are looking to boost our super savings, but it’s about more than money. We’re working longer because we enjoy the social connection, our career identity, and the sense of purpose it provides.

That makes sense because well-being research shows that a sense of purpose and social connection are major drivers of life satisfaction.

But it’s risky to seek life meaning and community in our careers alone.  If we look for these things to be provided by our work, they can all be taken away. 

And in our experience, aside from mourning the loss of career identity, a sense of purpose and work community, the unwilling retiree typically experiences financial stress and feels anxious about an unknown future. 

The answer is to have a plan B.

Start now

The most important thing is to broaden your interests beyond work.  We have observed that the most life-successful retirees are integrated into their communities well before they retire and have a strong sense of purpose beyond their careers.

Try to make an intentional decision to engage with the local community and get involved with causes you can start to feel passionate about.

And ask your financial planner to model out a scenario where you lose your job.  Will your day-to-day expenses really change that much?  And, if so, what could you do about it?

At Daniel Crump Financial Planning we take the time to project different scenarios with you, so that you can understand how resilient your financial circumstances really are. 

And that will build your confidence because you will see that you’re more adaptable then you might think.  If you’d like to learn more, give us a call.  We’d love to help.

Daniel Crump is the founder of Daniel Crump Financial Planning.  This article is general and does not consider your personal circumstances.  If you would like advice specific to you, please visit www.danielcrumpfp.com.au or give us a call on 0418 148 622.