want you to picture something with me for a second.
Imagine you're at a friend's house and you sit
down on a wooden stool only to discover one of
the legs is shorter than the other. That feeling
of being totally off balance and a little unsettled.
Now it's a bit like when you enter retirement
without a stable base. I mean I like to think
of a successful retirement. as a three -legged
stool now all the three legs need to be of equal
length and strength and neglect one and you're
going to be wobbly so today i'm going to run
through the three legs of our retirement stool
the three things we need to give equal thought
and consideration to before we hit that retirement
button so let's talk about the first leg you
probably guessed it money And it's rarely the
short leg, is it really? In fact, it's usually
that one leg that gets all the attention, often
at the expense of the other two. Now, we've all
seen it. Someone who retires with their finances
in perfect shape, but a few years later, they're
wondering why they're feeling so unsettled. And
they focus so much on the money that they've
actually forgotten everything else. I think even
when people do spend a lot of time on financial
planner, There are a couple of common mistakes
that most people make. Come on, Pink. The first
is pulling all their money out of the market.
I mean, let's say you've got a typical contributory
pension. It's probably been earning you a healthy
7 .7 % per year on average. But when many people
retire, they take their entire pot to buy an
annuity. It might only return 4 .7 per year rather
than 7 .7 per year. Now, don't get me wrong.
Annuities have their place. I'm a big fan. They
can provide a rock -solid guaranteed income,
actually protect you from market downturns. But
for many people, a smarter approach is to convert
just enough of your pension to an annuity to
cover your essential living costs. Leave the
rest invested 7 .7%. This way, you get the security
of a base income while still having potential
for a much higher return on the rest of your
money. I mean, a good financial advisor can actually
help you figure out the right balance for your
own personal risk tolerance. So if you can, it's
definitely worth speaking to one. So the second
big money mistake is not sticking to a budget.
I mean, I've seen it happen a lot. People look
at their savings and they think, oh. I've got
£300 ,000, that's £10 ,000 a year for the next
30 years. Sounds great on paper, but when they
actually get into retirement, they start spending
£20 ,000 a year, and suddenly, 15 years later,
their pots run out. Creating a simple budget
isn't that hard, and monitoring it takes very
little effort, really. I mean, if you're interested,
I've actually got a free spreadsheet that can
help. Just go to our website, it's at www .townsretire
.co .uk and the link's in the description below.
Okay, let's talk about the second leg of our
stool, health. I've heard too many stories from
people whose retirement was completely ruined
by an illness that arrived in their early retirement
years. And this often leaves them wishing they'd
retired a bit earlier so they could have enjoyed
it while they were still healthy. Throughout
our working lives, we look forward to holidays
as a time to completely let go, to lounge on
a sunbed or chill in an armchair and indulge
in the eating and drinking we want while we're
on holiday. Retirement isn't a holiday, it's
a new life, new rules. And sometimes the first
three months of retirement are crucial. They
can set a pattern and create routines that become
really difficult to break. So right from the
start, you need to have a plan. Think about how
you'll incorporate exercise into your daily life,
how your diet and eating habits might change,
now that you're not tied to that kind of fixed
nine -to -five time breaks that you get. Now,
a proactive plan will stop you from falling into
bad habits. As we get older, our bodies need
different things from exercise. You might find
that you replace some of your cardio work with
strength training to improve bone density i mean
it's a great idea though to have a chat with
your doctor about how you might want to make
any adjustments to your workout plans but the
good news is you can have a lot more time in
retirement to fit your exercise in and one of
the best and most accessible forms of exercise
in retirement is walking which i'm doing now
with a little extra time on your hands you might
actually find you can maybe walk to the shops
instead of taking the car or maybe get a bike
for longer journeys. If you were on a typical
nine -to -five schedule when you were working,
you may now discover that some other amazing
off -peak fitness classes that now perfectly
fit your new routine. Now, I know where I live,
for example, all the Tai Chi classes are during
the daytime. I could never get to them whilst
I was working. Let's talk about the third leg.
Did you guess it? relationships. Okay, so let's
picture someone in our community who might be
lonely or isolated. I'll just give you a second
to picture someone. So how did they get into
that situation? Did they lose a loved one who
they'd previously spent all their time with?
Did their friends all move away? It's often hard
to pinpoint why people ended up so isolated,
but we need to make a plan for ourselves to make
sure that we don't end up in a similar position.
I mean, giving up work is more than just giving
up a salary. It's leaving behind colleagues.
It's a lack of structure, lack of daily routine.
And this is where many of us lose our way. You
can't just sit and wait for the phone to ring.
You have to be proactive. What are you going
to do to keep a rhythm to your days? That'll
help you maintain or even deepen your relationships
with friends and family and your community. Now,
some of us get hit really hard by this loss of
status when we leave work. We go from being,
you know, head of this or manager of that to,
well, what? But, you know, a great way to engage
with your local community is to volunteer, maybe
at a local charity shop or even take a paid shift.
another shop in your community but many of us
find this difficult if we somehow felt that our
pre -retirement job had a high status i mean
it sounds silly right because actually the people
who work in our local shops are the beaten heart
of of our communities i mean they're vital to
keeping it vibrant but being there in a different
role can feel strange i mean if you've never
worked in retail before the key is to try something
that challenges you. I mean, if you're only doing
things within your comfort zone, then your world
could end up shrinking and your confidence might
shrink right along with it. Now, another hub
for the community is the local pub. It's a great
place to visit, but a terrible place to spend
all your days. I mean, you see people there on
a Friday night having the time of their lives,
but popping to that same pub, at 3 .30 on a Tuesday
afternoon and you'll often see regulars who you
know look far from sociable really and with that
our three legs are complete and they're all of
equal length because we've given them equal thought
right now I'm a few months into my own retirement
now and I'm absolutely loving every minute of
it but I am so glad that I did this planning
up front or I might have become a little too
familiar with homes under the hammer i hope this
has given you some food for thought and i hope
you follow along on my journey see you on the
next one