For more years than I care to remember, I, along with many other retirement commentators, have had an unhealthy adherence to the concept of the retirement journey.
Don’t get me wrong. I do understand that, unless you die early or work forever, most people will experience some form of retirement life stage. But I am now questioning the assumption that retirement plays out like a journey.
And that, by suggesting this linear trajectory, we are using lazy language that promises older Australians something that they may never experience. ‘Actual’ retirement is, in fact, a very diverse, radically different series of events that represents a game of snakes and ladders rather than a logical journey with predictable stopping off points.
Why have I shifted my narrative?
My ‘ah ha’ moment came in late September at the launch of the Super Members Councils’ Older women’s economic security in retirement report. At this launch a very fine panel of women, who know a lot, discussed women, retirement savings and equity. Retirement journeys didn’t rate a mention. Instead they talked of ‘life moments’ which occur as women move in and out of work, often due to circumstances beyond their control. They spoke of health, family and access to employment. Family violence, menopause, separation and caregiving duties were also canvassed. This struck a huge chord with me as I realised I had been referring to retirement in a linear sense when it’s much more akin to an unpredictable zig, zag, and zig again movement.
This concept of ‘moments’ is also borne out by the most recent Australian Bureau of Statistics (ABS) Retirement and Retirement Intentions, Australia report (2024-25). This update confirms that health, retrenchment and ‘other’ issues (often family-related) are reasons that more than 20% of Australians left their most recent job and retired.
The oft-quoted cliché is that (retirement) life is a journey, not a destination. But that’s just not true for so many retirees. It’s more akin to a mosaic of moments, along the lines of John Lennon’s prescient reminder that life is ‘what happens when we’re busy making other plans’.
Here’s how retirement planning is being experienced, right now, by three of my acquaintances (not using their real names, of course)
Ian is 68
He was retrenched a year ago and has lost count of the number of jobs he’s applied for. It’s possible that some form of ageism is preventing his CV from reaching the top of the pile. He is now accepting painting or handyman jobs from friends at his service club. He’s grateful his wife is working and earning enough to cover their household essentials, but their retirement plans are on an indefinite hold.
Sarah is 58
Separated since her early 50s, Sarah felt she was ‘on track’ to retire in a few years and then receive a part Age Pension a year or two later, at age 67. But a diagnosis of breast cancer forced her to leave work much earlier than she expected. She is unsure of her prognosis, facing indeterminate medical bills and unclear whether she can work again any time soon.
Rob is 75
Life was good until recently for Rob and Heather – visiting kids overseas, enjoying cycling trips in Australia, anticipating many more years of fun times together. Sadly Heather now has dementia and Rob has become a full-time carer. He’s trying to make sense of aged care rules and decide what to do about accommodation for both of them and what this will mean for the family home. What retirement? he asks.
Yes, these are fairly dramatic life changes, and some people are fortunate enough to escape such misfortune. But Ian, Sarah and Rob are very real examples of how life moments do happen just when we think we have things sorted.
What’s this got to do with the wider retirement industry?
How can a ‘life moment’ or ‘retirement mosaic’ model inform retirement planning? Could it ultimately create more appropriate retirement income support for Australia’s swelling ranks of retirees?
I think it might.
It’s fair to say that since the Retirement Income Review was published in 2020, many super funds have struggled mightily with the Retirement Income Covenant – even though they have had more than five years to deliver better member outcomes in the move from accumulation to decumulation. There are a multitude of reasons why. But what if one of the main barriers is that the target is simply too big. Getting ordinary Australians to look at their super savings and engage with how it will provide support over a (hoped for) 30-year retirement is overwhelming. And so far, it’s not working particularly well.
What if, instead, we were to approach the financial planning part differently? By breaking it down into manageable moments?
Here are six very common life events:
- Health issues and upsets
- Love lost and found
- Work lost and found
- Family wealth transfers
- Unexpected windfalls
- Empty nesting and property sales or purchases
At which age do each of these life moments occur? With the exception of empty-nesting (which assumes adult children leaving home), each and every one of these common ‘retirement issues’ can actually happen between age 16 and 99 or beyond. There’s really no useful median age underpinning these events. But there are very specific rules and strategies that will help retirees to maximise their income if or when such situations arise. Put simply, the notion that these life-changing moments might conveniently fetch up at age 60, 67, 70 or 75 (i.e. specific retirement income trigger ages) is fanciful at best. But the need for information and support to best manage these big money moments and to understand the effect on your retirement entitlements and returns is massive.
So how might a ‘life moment’ mosaic framework – as opposed to a linear journey model – help funds, advisers and others who are at the coal face assisting ordinary retirees to transition from work to retirement, albeit with some stints back in the workplace in many cases?
The following thoughts are no more than a starting point for a discussion – hopefully they will spark other ideas that can ‘loosen up’ the current rigid ‘journey’ discourse:
Let’s reframe the conversation
Make sure fund members or clients understand that because you can do something at a certain age (e.g. make downsizer contributions at age 55, access super at 60), it does not mean it’s suitable, useful or even a good idea for them – it’s highly personal, depending upon their wider situation, assets and goals. You don’t have to do anything at any particular age. Rules are really just triggers or opportunities to be used when the time is right for you. Yes, you can retire at 67 – but, according to the ABS, an increasing number of Australians just don’t want to.
Accept that retirement is no longer a ‘thing’
It probably never was, but this later chapter of life is becoming increasingly diverse. We don’t treat our first three decades as one thing. We differentiate between primary school age children, then adolescents, then young adults and are very respectful of these huge differences in life experiences. Retirement needs to be viewed in the same way. It’s a wild ride with many unexpected occurrences and needs change dramatically from 60 to 90 and beyond. Which means that …
…Retirees do not need to ‘know it all’ to get started
There is no need to understand the entire superannuation ‘bible’, just the bits that are relevant to the retiree at certain life moments. Which particular rules of super, tax, investments, and Age Pension entitlements apply right now? How does this change if certain other things happen? This way of thinking could encourage a much more flexible client interaction, mainly because it’s much more relevant in the here and now.
Why not offer packages or ‘clusters’ of information?
Industry participants such as funds, advisers, lifetime income stream or annuity providers could provide packages of episodic advice or support around changing needs including:
- Relationship status
- Health dynamics
- Work status
- Inheritances
- Inter family loans
- Property decisions
This would enable those pre- and post-retirement the comfort that there is a ‘package’ that suits their particular life moment, rather than an insistence upon a comprehensive ‘whole of life’ plan that they don’t wish to engage with as it feels too daunting.
Could these packages suit new tech hybrid advice models?
Of course they will. The newer hybrid models of ‘digital plus adviser’ solutions is a natural way of creating responsive packages with just the rules that matter for retirees facing varying life dilemmas.
Yes, this ‘life moment approach does suggest the need for a shakeup of thinking in the comprehensive advice sector. But is that a bad thing? It could offer relief and increase engagement if an adviser is less insistent on the ‘full retirement journey’ when the client is feeling that life is anything but predictable right now. Engagement remains an ongoing challenge, but maybe that’s because we’ve asked retirees to commit to a full 30-year plan when a five-year model suits their mood and circumstances so much better?
What do you think?
Do you believe that the retirement journey analogy is still the best way to plan?
Or do you see value in my belief that life is more like a game of snakes and ladders where we rise, fall and – hopefully- rise again, finances intact, and definitely the wiser.
Kaye Fallick is a retirement commentator and author, www.kayefallick.com. This article is general information and does not consider the circumstances of any person.