Once thought of as an ‘end goal,’ retirement for many Australians now represents a new beginning – a time to learn, grow and explore.
Life expectancies are on the rise and medical advances have improved our general health, giving people more time to thrive in their later years. Another game changer has been our superannuation system, which turns 30 this year. With three-decades worth of superannuation savings, many Australians aged in their 50s and 60s have accumulated meaningful amounts of money in super.
Yet research shows that people reach a crunch point as they approach the second half of their life – where stresses about family, employment and financial security converge with negative feelings towards the traditional concept of retirement.
It is at this point when people most need advice, to plan ahead and make the transition to their second half as easy and fulfilling as possible. What that lifestyle looks like is different for every person. What’s important is the flexibility to choose. While travel, friendships and family featured prominently in people’s responses, so too did the strong desire for personal fulfillment – on both the work and retirement front.
For many people, this means changing careers in later life and staying in the workforce for longer. This societal trend has benefits that go beyond the financial. It offers people opportunities to stay social, mentally active and, importantly, maintain a sense of purpose. Therefore, it’s time to change how we think about retirement – it’s not the end goal – it’s the second half.
A mid-life career switch has unexpected benefits for older Australians, as well as the nation. New research shows over one million Australians aged 45 to 65 are prepared to work up to 10 years longer in a new career. The trend means many older Australians could also increase their super savings by switching to a career they are more passionate about.
Chief Executive Officer of Colonial First State Superannuation, Kelly Power, said middle-aged Australians were re-imagining the ‘second half’ of their lives as a vibrant opportunity to pursue their passions and gain better work life balance. Our research shows that people don’t see retirement as an end goal, but instead want to continue to learn, grow and explore – and that includes through changing careers and remaining in the workforce for longer,” Ms Power said.
PURSUING PASSIONS, IMPROVING work-life BALANCE
The main reason people want to change career is to pursue something they are more passionate about (36 per cent), followed by wanting to improve their work life balance (31 per cent) and wanting to earn more money (31 per cent).
Ms Power said new thinking around retirement gave many older Australians the opportunity to continue to participate meaningfully in the workforce over a longer period, while substantially increasing their retirement savings. “Working longer has traditionally had negative connotations, but pursuing a career you are truly passionate about, or achieving better work-life balance, helps people stay socially and mentally active and, importantly, maintain a sense of purpose,” she said.
Top tips for ‘unleashing’ your second half:
- Consider your life goals – talk to your family about the type of life you want to live in your ‘second half’ – what you want to do more (or less) of and what really makes you happy.
- Consider putting in place a savings plan for any personal goals, such as funding your living expenses while you retrain for a new occupation or paying for education expenses. This could include making additional contributions to super or setting up a savings plan outside of super if you think you will need to access the money before the super rules will allow.
- Talk to a financial adviser about how you can make the most of your own personal circumstances. For example, you could consider accessing your super via a transition to retirement pension, once you reach preservation age. This could provide extra cash flow whilst you retrain, to allow a better work-life balance
- If your plans include downsizing the family home, consider topping up your super with part of your sale proceeds. The downsizer rules allow you to contribute up to $300,000 per person, from the proceeds of the sale of your home. From July 1, 2022, this is available to people aged 60 and over.
Source: Colonial First State – cfs.com.au.