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Irish Life Research Indicates a Lack of Preparedness in people about to retire

Retirement Coach Marianne Heron shares her advice on how best to plan for a fulfilling retirement
  • The majority of 55-65 year olds (59%) with private pensions admit that are unaware of the vital decision they’ve to make prior to retiring that will affect their retirement income
  • Just over 40% know the value of their pension pots with men significantly more likely to be aware than women
  • More than half (57%) are excited about retirement, while 28% say they feel nervous

New retirement research commissioned by Irish Life, Ireland’s leading pension company*, has indicated that 3 out of 5 Irish people approaching retirement are unaware of the vital financial decision they’ve to make affecting their retirement income. While the majority are aware of the options available to them when drawing down their pension, most do not grasp the need to plan ahead to make this key decision prior to drawing down their private pension. This decision is of utmost importance as ultimately it will determine your retirement income and so warrants careful consideration. The research also revealed that just 31% of those approaching retirement have spoken to a financial broker or advisor in the past year, while 25% have never consulted a financial broker or advisor about their retirement plans.

To best prepare for retirement, Retirement Coach and author, Marianne Heron, recommends checking in with a financial advisor initially between five to ten years before you plan on retiring to ensure you are financially on track. Retirement is one of life’s biggest changes and, like any milestone, needs to be prepared for both financially and personally, Marianne Heron advocates research and enrolling in a pre-retirement course to prepare yourself when that time comes. In her Personal Retirement Lifestyle Guide sponsored by Irish Life, ‘Rewire don’t Retire’, Marianne explains that retirement isn’t a one-off event but an ongoing process of adjustment with several distinct stages:

  • Anticipation/anxiety: Beginning to look forward to retirement and building your nest egg (you may not be paying attention to the non-financial aspects of retirement). You could also be dreading this event.
  • The ‘Big Day’: With all the handshakes and celebration.
  • The Honeymoon Phase: This seems like one long holiday (you may not have started planning some kind of purposeful activity or you may spend too much money or alternatively become isolated.
  • Disillusionment: Otherwise known as the ‘Something is Missing Syndrome’ (SMS) which hits anywhere from six months to a couple of years into retirement The novelty has worn off and it is easy to slip into depression which affects up to 40% of retirees.
  • Renewal: You start to deal with the realities of retirement and begin building a new identity
  • Rewirement: Reorientation and forging a new identity. You are now living a life of purpose.

Retirement tends to be portrayed like the ending of a fairy story but, in reality, is one of the top ten most stressful life changes. There are no warnings about the impacts retirement can have such as health and marriage problems alongside the financial strain many retirees experience. These issues, Marianne notes, are not a result of retirement itself but a consequence of lack of planning. “Contrary to popular belief, the ‘Happiness curve’** of life suggests your senior years, particularly those between 65-74 are the happiest days of your life. However, this happy stage of life is not a given – it requires forward thinking and active planning which can be as simple as putting a plan to ABC” says Marianne.

The ABC plan Marianne refers to is based on three simple elements:

AAttitude: Having a positive outlook is vital for effectively dealing with change.

BHaving a ‘bee in your bonnet’: Once retired it is important to find your passion such as a new hobby or volunteer work which will help you to form a new identity. Leaving work often removes our sense of ‘purpose’ and ‘status’ which now needs to be replaced.

CContact: Social contact improves your wellbeing and protects your health. Those who maintain positive relationships are less likely to suffer from certain health issues in later life.

Marianne attributes the delay in retirement planning to a negative association with old age. For many it becomes something to dread so they put it to the back of their minds. But Marianne believes this shouldn’t be the case. “Retirement is a fantastic opportunity to be who you want to be and do whatever you want to do in life – the key is to be proactive and to take control of your own wellbeing.” says Marianne.

A significant awareness campaign is currently underway by Irish Life to help educate people on the steps that need to be taken to effectively prepare for retirement. For more information or to download or order a free copy of the” Rewire don’t retire” book courtesy of Irish Life please visit: www.irishlife.ie/plan-your-retirement

*Based on market share figure December 2018
**Marianne refers to the ‘Happiness Curve’ as written about in The Happiness Curve: Why Life Gets Better After 50 by Jonathan Rauch.