Most of us can expect to spend many years in retirement. Men aged 65 in 2020–2021 could expect to live more than 20 years, while women could expect another 23 years. Yet, while most of us take financial planning very seriously, we tend to give far less thought to the other impacts of leaving a career.

Cynthia Munro, director and principal consultant at C Squared Consulting in Wellington, isn’t that keen on using the word retirement.

“We don’t retire in the way our grandparents did,” she says. “We enter a new life stage that’s filled with potential, opportunities and extended time, if health is on our side.”

No wonder people’s bucket lists now typically involve travel, new hobbies and more family time.

“The problem is that, if you jump into retirement without planning, the honeymoon period where you love your new freedom could be short lived,” Munro says. “We have some kind of framework shaping our lives from school, to our work roles. If we suddenly find ourselves without a framework when we leave the workforce, all of that freedom can feel overwhelming.

“A lifestyle plan can form an important part of our transition by providing structure.”

Creating a lifestyle plan

Munro points out that a lifestyle plan can encompass interests outside work you have now or would like to develop, ideally involving social interaction outside the home.

“You should think about any skills you can take with you into retirement and new skills you can acquire to help you retain a sense of self-worth, confidence and sense of purpose,” she says.

It is also important to consider the role family will play.

“You may look forward to spending more time with your partner but, when neither of you is working, being together all day, every day could put pressure on the relationship,” says Munro. “It’s vital that, before you retire, you talk about each other’s expectations, so there are no surprises.

“If you have young grandchildren nearby, you also need to have an honest conversation about whether you’ll be expected to provide child care. If that’s something you’d enjoy but would prefer to help out on no more than, say, one or two days a week, you need to make that clear well before you actually retire.”

All or nothing?

Ideally, the transition to retirement will include a gradual stepping back from work.

“I think finishing on a Friday and not going into work on Monday would be too much of a shock to the system,” says Ron Louis OAM FCA, a former partner at Butler Settineri in Western Australia. “Accounting, auditing and taxation is a very, verystressful type of business and I felt I’d like to wind down slowly.”

Once he and his partners had decided who would take over his role in the practice, Louis cut down to four days a week.

“For a year, my successor came in on discussions I was having with clients then, on the fifth day, handled matters herself,” he says. “The following year I cut back again, to three days. This worked well for both of us – I’ve heard nothing but good reports about her from clients.”

 Pictured: Gary Ogden FCA (left) and Ron Louis OAM FCA (right). Image credit: Philip Gostelow.

Selling the firm

For Gary Ogden FCA, the process was a bit more complicated.

“I had worked as a sole practitioner for 33 years, with no more than three staff at any time,” he says. “I started thinking about retirement in 2018 but, even though I couldn’t find the right fit for a merger and my staff weren’t interested in taking over my fees, I didn’t worry too much. Then, when COVID triggered a skills shortage, I lost my staff to firms offering pay and incentives I simply couldn’t match. It was also impossible to find replacements.

“I was at my wits’ end, until a well-respected mid-tier firm in the city made an offer for the business, which included a two-year retention clause and the requirement that I continue to work three days a week for them during the two-year handover period.”

Despite having great surroundings with supportive and friendly colleagues, the transition had its challenges.

“Adapting to the significant reduction in work hours was quite challenging,” Ogden says. “The clients I was passing on continued to contact me first and I spent a lot of time allaying their fears. I also found it very difficult to accept my new role ‘off the tools’ and think of myself as essentially retired. My mind was having trouble letting go.”

The resulting stress led to health issues. “I took advantage of the employee assistance program and sought counselling,” says Ogden. “I started taking a proper lunch break, which often included a gym class. This was a rarity and an absolute luxury when I worked for myself.

“After nine months my health had improved, I was far more relaxed and only going to the office for the stipulated three days a week.”

Munro advises her clients to include good health – physical, mental and emotional – in their retirement plan.

“Sometimes poor health is unavoidable but, for many of us, simple measures like eating well, exercising regularly and maintaining healthy social connections can make a huge difference to how we feel when we retire,” she says. “Many more options are open to you if you’re fit and well.”

Maintaining connections

People retire at different times and for different reasons. Some need to work for longer than they’d hoped because they need to build up their savings. Others would prefer to stay at work rather than face compulsory retirement or, like Ogden, find their decision is shaped by outside forces. For Louis, a number of factors played a role.

“I found I was getting tired of the amount of concentrated reading I needed to do to keep up with tax changes – usually three or four publications a week,” he says. “I was also aware of the younger colleagues coming up behind me who were keen and able to become partners. We can’t let these guys down because they’ve been working for the firm for years,” Louis says.

He knew that the thing he’d miss most was daily interaction with clients and colleagues. “Social connection is crucial and, while I love spending time with my children and grandchildren, I also wanted to retain my sense of purpose and identity,” he says. “For me, that means giving back to society and helping people, and I’m grateful I’m still able to do that.”

“Social connection is crucial and, while I love spending time with my children and grandchildren, I also wanted to retain my sense of purpose and identity. For me, that means giving back to society and helping people, and I’m grateful I’m still able to do that.”

A justice of the peace for 40 years, he is continuing to provide the service four times a month at various signing centres in the Perth area, including police headquarters. After being awarded the Medal of the Order of Australia in the 2021 Queen’s Birthday Honours List, he was invited to mentor a group of new recruits at the Western Australian Police Academy. He also sits on two CA ANZ committees and, once a week, attends a lecture on living in retirement.

“I’m also fulfilling my ambition to travel,” he says. “I think travel is very important for meeting people and having new experiences, and it doesn’t have to be overseas.”

Ogden made friends at the new firm and will consult if they need help with any of his old clients.

“Working in Perth has renewed my interest in exploring the city,” he says. “And, after two months of full retirement, I’m still going to the same gym that saw me through the last two years. I realise now this is a very important platform for my future mental and physical wellbeing.” He hasn’t felt any sense of losing his identity or purpose.

“I have so many things on my bucket list I’m wondering how I ever managed to find time to work,” he jokes. “I’m still working out how to slow down and coming to terms with how each day of retirement should look for me, but I know now that developing outside interests before you retire is the key.

“Above all else, keep yourself fit and continue to interact with people,” he says. “Then you’ll find there’s no end of opportunities to keep your mind occupied and retain your identity.”

Pictured: Ron Louis OAM FCA (left) and Gary Ogden FCA (right). Image credit: Philip Gostelow.

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Concessions for retirees

Retired CAs are valued members, who can continue to contribute to the profession by mentoring younger CAs and sharing their knowledge on committees and councils.

If you are a retired CA ANZ member and have an annual income of $50,000 or less, you are eligible for a reduced membership rate. If you are fully retired and don’t hold a Certificate of Public Practice, you are also exempt from continuing professional development requirements.

To find out more email: [email protected] or call 1300 137 322 (Australia) or 0800 469 422 (New Zealand).

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What I’ve learned

Sole practitioner Gary Ogden FCA can see now that better planning would have made retirement easier and less stressful. Here, he shares what he’s learned.

1. Recognise the signs that it’s time to start thinking about retirement. For me, a new financial year became less and less exciting, as my appetite to stay abreast of the constant barrage of new legislation began to wane. I was also losing interest in keeping up to date with changes in technology.

2. Prepare an exit plan three-to-five years before you plan to retire and stick to it. As a sole trader, I should have been spending this much time preparing my business to sell or merge, for the best possible financial outcome.

3. Don’t just tinker with the idea of retirement: set aside time to work on it. Accountants are great at giving advice to others but tend to leave their own affairs until last.

4. Decide whether you’ll keep your professional memberships, licences and subscriptions, in case you need or want to go back to work.

5. Accept that stepping back can be challenging and be open to getting help from a psychologist, counsellor or consultant.

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Living longer, retiring later

Life expectancy changes as you grow older and survive early childhood, adolescence and early adulthood. On the right, are the average life expectancies for those born in 2021.

The most common age for New Zealanders to retire is 65, when you are able to withdraw your super and some other pension payments start. The new National government may consider increasing the retirement age, as Australia has done.

In Australia, 67 has been the qualifying age for the age pension since 1 July 2023 and this will increase to 70 by 2035. At present, if you’re retired you can access your super between the ages of 55 and 60, depending on when you were born.

If you continue to work, you have access to super at 65.

81.3	Australian men
85.4	Australian women
80.5	New Zealand men
80.4	New Zealand women

Sources: Australian Institute of Health and Welfare, and Statista.

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