We are running the race to retirement riches backward
By Bec Wilson
We’ve been sold a dream that kicks in at 60, 65 or 67. First by governments promising age pensions back in the early 1900s, and now by the superannuation industry selling glossy visions of leisure and freedom.
And the planning for it? That usually happens just before people stop working – often too late to reshape anything meaningful.
But for a growing number of Australians, it’s not retirement itself that shapes their future. It’s the decade or so before it. That’s the window where you still have time to make strategic decisions – about money, work, lifestyle, and how you want the next 30 years to feel.
The best retirements don’t start at 65 or 67. They start in your 50s, with practical decisions that give you more flexibility and less pressure.Credit: Getty Images
The problem is that the word retirement still sounds like the end. It feels old. And for many people in their 50s, thinking too far ahead feels uncomfortable. They put off planning, or assume their super will take care of itself, or just hope things will work out.
But by the time they’re ready to engage, they’re often left asking, “why didn’t I know this sooner?”
The truth is, the best retirements don’t start at 65 or 67. They start in your 50s, with practical decisions that give you more flexibility and less pressure – now and later.
That might mean getting serious about salary sacrificing or topping up your super while you’re still earning well and getting it into the position where, if it compounds at a long-term return rate of 7 to 10 per cent over 15 years ahead, before you retire, that it will be “enough”. And you can even forecast that in your late 40s or 50s.
Most people don’t think about their super until something shifts. Credit: Andrew Quilty
It could mean getting the mortgage under control as early as you can once the kids are (finally) off your hands. Or thinking differently about your home versus investment mix, and perhaps choosing to downsize and shift money into superannuation once the downsizing window, which so many people are unaware of, opens at the age of 55. That’s when the government allows you to put in up to $300,000 per person from the sale of your principal residence if you’ve owned it for 10 years or more.
It might see you contemplating whether you can change your work rhythm, and how you want to spend your time as your life opens up again. But that wouldn’t be as easy to do if you didn’t have your financial foundations in place.
It might also mean looking beyond super altogether. Midlife is the ideal time to build up other income-producing investments, take advantage of tax-effective ways to invest, and to review your insurances to see if you really need to be paying such high life insurance policies now the kids are more self-sufficient, or if you could redirect those funds into savings.
These are the real levers that are often overlooked until the latter stages of pre-retirement that shape how resilient and relaxed your 50s, 60s, and later, your retirement years will be.
Retirement isn’t the goal. A good life is. And it starts long before the finish line.
In my view, it’s no longer about retiring early. It needs to be about having choice as you move through this stage of life. It’s about shaping what your 50s, 60s, 70s and 80s might look like – and using the early years of that process to lay the groundwork.
That’s what I call the pre-retirement or midlife set-up phase. Then, I want people in their 40s, 50s and 60s to start looking for joy and meaning in the now – not just cramming all their hopes and dreams into a retirement plan and telling themselves they have to stick it out in a job they no longer enjoy for the next 10 years.
We shouldn’t be waiting for retirement to get to the good bits. We’ve had more than 30 years of superannuation to help build up a decent savings base. This is the time to reset, realign, and make the system work for you – not the other way around.
Too many people still treat super as a set-and-forget product, and retirement as the next destination for their plan. They assume they can’t influence their super much, or that it’s all too complicated. And they often carry around this vague sense that they’ll never have “enough”, without ever learning what enough actually means.
As a result, they miss the chance to build a realistic strategy for retirement early then to plan for those years before retirement, when the kids are independent, the mortgage is smaller, and life might actually be more affordable – and more fun.
That’s the time when many people could enjoy more lifestyle freedom, shift to part-time work, or finally start living with a bit more ease. But only if they plan for it.
The truth is, getting your act together earlier – looking at your super, your investments, and how you want to live, work and play in the years ahead and building a picture – can add hundreds of thousands of dollars to your future position. Not through magic, but through smart, informed decisions made while you still have time to act.
Because the real secret is this: retirement isn’t the goal. A good life is. And it starts long before the finish line.
Bec Wilson is author of the bestseller How to Have an Epic Retirement and the newly released Prime Time: 27 Lessons for the New Midlife. She writes a weekly newsletter at epicretirement.net and hosts the Prime Time podcast.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.
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