By Dr Eugene Brink
Retirement is probably one of the biggest events in one’s life. And yet, so many people at many levels are totally unprepared for it.
Many people do not realise that all of a sudden you will have to give up many things that you have always taken for granted. This could lead to serious boredom and even depression as feelings of uselessness and irrelevance kick in.
You therefore need to make sure on an emotional, a financial and even a social level of what you want to do after retirement and then plan for it and do it.
“The key to an active, satisfying and happy retirement is more than just having enough savings. It also includes interesting recreational activities, creative projects and mental and physical wellbeing,” says Ivory Johnson, founder of Delancey Wealth Management and financial contributor to CNBC.
He says fortunately there are a number of viable solutions that could perhaps supplement any financial shortfall, including part-time work related to your career. A teacher could for instance offer extra classes in a subject. A scientist can offer part-time classes at a school, college or university, or he could help with drawing up and adjusting the curriculum.
“Many of us have hobbies or passions while still working. They could provide an extra income as well as access to a social network of like-minded people. If you enjoy gardening, consider working part-time at a nursery before leaving your job,” says Johnson.
It’s different for men and women
Johan and Helena Lourens are a couple from the West Rand who retired some years ago and they have many hints on how to live your golden years.
Johan says the major part (50–75%) of your emotional preparation for retirement depends on successful financial preparation. “The rest is getting your head in gear long before retirement regarding what you are going to do after retirement. You must identify your passions and strong points and then start on those so that you can continue with them seamlessly after retirement. You should therefore preferably already get busy with it before you retire.”
He refers to the advice by Paul Tournier, a Swiss pastoral counsellor, in his book Learning to grow old. “The ‘highest good’ that you will be doing after retirement, should include an element of giving back to the community either through a church or other social institution.” It gives your own life meaning and satisfaction by helping others and thus giving something back.
Johan has two practical suggestions: using your woodwork hobby, for instance, to make toys for under-privileged children; or, if you are an attorney, doing pro bono work for needy people or empowering and mentoring younger attorneys.
According to Helena there is a fundamental difference between the retirement of a man and that of his wife. “In my case, as a woman, I filled my role as a mother and homemaker in addition to my day job at a state department.
“When you then reach retirement it is not such a radical change seen in the light of emotional readiness for retirement. At that stage you will already have been busy for a considerable time greeting your day job and falling back 100% on your role as homemaker, grandmother, etc.”
She says she could then again give attention to aspects for which she did not have time during her professional years, such as needlework, knitting and baking. “You also have much more time for reading and loosing yourself in gardening. Helping with certain tasks at the church also makes a big difference.”
She agrees with Johan that the most important aspect of successful retirement, is financial preparedness. “However, this takes some preparation from your first salary cheque. Remember, if you are financially ready, your emotional preparedness will get a huge boost.
“If you have a job where you contribute to a pension fund, this is a big plus. But believe you me, on retirement your financial basket must contain many more products than just a pension fund in order to maintain the same lifestyle as before retirement.”
She then enumerates these “extras”: very-long-term savings plans, retirement annuities, policies, investments in and leasing of property (additional to your residence). “On retirement all debts on your property, cars, etc. must be paid off. Clothing accounts should be closed. A credit card should not be used anymore, but may be used by way of exception during foreign travels because credit cards are accepted worldwide. Immense financial discipline must be maintained with regard to credit-card spending, if this should be done at all.”
She says on retirement one should not spend large amounts of retirement money on an expensive vehicle or a “little house by the sea”. If you are dreaming of a house by the sea, this house must already have been paid off before retirement. Remember to keep on saving after retirement for, for insurance, holidays, presents and contingencies. Such an emergency fund is essential.”
Expect to live longer
The financial services company Old Mutual points out that, in view of the present and future progress in technology and medicine, people can expect to live progressively longer and this inevitably has implications for your pension and lifestyle. This means that, if you want to retire at 65, you will have to make provision for an additional 20 to 25 years.
On the one hand, says Old Mutual, your vehicle and mortgage will be paid off, but on the other hand you must prepare for health expenses because getting older comes with unwanted diseases. You will also still have to pay your electricity and buy groceries.
Ivory Johnson, 18 Maart 2019, “A happy retirement is more than just money”, https://www.cnbc.com/2019/03/18/a-happy-retirement-is-more-than-just-money.html.
Old Mutual, 2019, “Retirement”, https://www.oldmutual.co.za/personal/retirement-planning.