Retirement challenges shared are retirement challenges halved – or so the story goes. But with a spike in ‘grey divorces’, the journey can be doubly difficult. In this excerpt from her book, The No-Regrets Guide to Retirement, licensed financial planner Patricia Howard …
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Going it alone can be the hardest thing in retirement. And sadly, more and more older Australians who divorce – commonly referred to as silver splitters – are among those who find themselves in this situation. Through divorce or death, through choice or not, the reality is 25 per cent, 2.3 million, of Australian households have just one person living in them.
This makes it doubly important for you to think through your retirement plans and prepare for whatever eventualities might come your way. If you are living alone, you need to review your living arrangements. While men are faced with this issue too, in my experience they seem less sentimental and less attached to the family home. You might be desperate to stay in your family home, where you feel surrounded and comforted by loving memories, but is this practical? Can you do all the tasks required to maintain the property and, if the answer is no, will you have the finances to pay for someone else to maintain your home?
Think through what would happen if you fell ill during your retirement and had to recuperate at home. When my parents retired about 40 years ago, if you were sick in retirement you would most likely suffer a slow, downward and usually irreversible deterioration of health. That isn’t the case these days.
I have seen clients go through quite dire medical circumstances only to see them 12 months later looking better than they ever did before. Typically, this is because there is nothing like a health scare to prompt you to give up the cigarettes, cut back on your intake of alcohol and lose a bit of weight. Add to this a bit of mandatory exercise and most people start feeling better than they have in years.
Read more: Divorcees missing out on major share of asset
You need to plan for this. It’s likely that at some stage you will spend time in hospital and come back to your home, where community support staff will help provide care for you and where you can fully recover. You need to have a home that can accommodate this scenario. If your home has poor access or a lot of stairs, for instance, this probably isn’t a good place for you to live in retirement.
Another important issue is to think through what you will do if you are no longer able to make decisions about your finances or medical care. You need to be proactive in putting in place powers of attorney – both financial and medical – so someone who cares about you can step in and make these decisions for you. It is important you write down what you would like done in these situations and to do this well ahead of time, so the message is clear and coherent.
Simplify your life
In coming to terms with possibly being alone for the rest of your life – and that’s not necessarily a bad thing – you should look to simplify your life. And to be honest, most people find this one single step very liberating.
While this can apply to men, I believe it applies more commonly to women. For reasons unknown, they just seem to thrive on complicating their lives! Start with your home. A garage sale and spring clean is always a good thing and never more so than when you retire. What you can’t sell, you should give away to charity or a local recycling depot and what can’t be reused, you need to take to the tip. You have to be practical.
There will be times in your retirement when you can expect to need home help. Someone to come in and clean or perhaps help you recover from a minor medical event or provide some home nursing. Do your bit by making sure your home is tidy and free from clutter. Local governments are offering more and more services to help people stay in their own home, but they will observe your living conditions and have the power to recommend that you move if it seems you aren’t coping with living on your own.
Read more: Declutter your life and save
And while you’re tidying up your home, you should also be tidying up your financial affairs. Have all your investments formally detailed in writing and keep these records in one location. If possible, store them online. Everything should be simple and clear cut.
Most people only need to have one bank account, and this should be where money comes in from your investments each month and from where all your expenses are paid each month. Have a credit card for convenience, but be meticulous in paying it off in full each month. You would be surprised how many people, even in retirement, don’t. Use a credit card to make regular payments such as electricity, gas and other essential services. This can make life a lot easier as you only have to make one payment a month to keep everything ticking over.
This can be particularly useful if you have to spend time in hospital, for example. Not only will you not miss paying these bills, but you will only have to remember to make one payment a month and you can set this up to happen automatically. Everything should be simple and stress free.
Read more: Common mistakes when writing a will
Take time to sort out your paperwork. It should be easy for someone going into your home to work out where your key documents are, such as your will, medical insurance, details of your investments and titles for any properties you own.
If your finances are sorted and simplified in retirement, you should not need to lodge a tax return each year, but if this is not the case and you do need to lodge one, make sure you keep all your papers in one spot and that these are easy to sort through. Your affairs should be simplified so your tax return is much the same year after year and the papers you need to complete it are easy to find.
Do you finds decluttering difficult? Are women the worst offenders?
Patricia Howard, author of The No-Regrets Guide to Retirement: how to live well, invest wisely and make your money last (Wiley), is a licensed Australian financial adviser. She has a commerce degree from the University of Melbourne, holds her own Australian Financial Services Licence and recently passed the FASEA Financial Adviser exam. Find out more at www.patriciahoward.com.au
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Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.Going it alone in retirement – an expert guide
