With many economists expecting the Reserve Bank to start cutting interest rates in early 2025, returns on term deposits could feel the pinch. Private credit is an alternative, but those pursuing this investment option will need to do their homework – thoroughly.
It’s been a sharp learning curve, but super funds are learning how to better engage with their members, especially those in retirement. And members are responding positively, with 70 per cent saying they trust their fund to make the right decisions.
How to get your retirement back on the right path
For Mark Gray, an Auckland-based dermatologist specialising in surgery on head and neck skin cancers, it was a downhill ride to retirement. Financially secure, professionally well respected, the plan was to step back at 65 and be out of the workforce at 70.
That plan literally came to a crashing halt about seven years ago when Gray, then a 58-year-old cycling enthusiast, crashed his bike while riding downhill at pace and in the wet. It wasn’t a matter of a few bruises and an injured pride – he ended up in intensive care for several weeks with broken bones and bleeding on the brain.
As Gray recalls, “I spent weeks in hospital, and, after getting out, a prolonged recovery at home. I was pretty flimsy for quite some time. Even today I’m only about 80 per cent of where I was before the accident, with deficiencies around memory and some impaired cognitive functions.”
It also meant his retirement plans were in taters – in one fell swoop, the decision on when to retire was snatched from him.
“For some people, retirement comes as a pleasant surprise. For others, like me, it was a rude awakening. Suddenly, your life seems empty, vacuous. In my case, my skill set was super specialised because I had spent a life working in one narrow area of one profession and hadn’t really nurtured other skills or hobbies.
“The other aspect of this specialisation is that I was good at what I did so it reinforced my sense of identity, of who I was, that was underpinned by the respect I got from my peers and patients.”
Interestingly, Gray’s sense of self-worth in his chosen profession did not translate into a love affair with medicine.
“The funny thing was, even though I was really good at what I did, I wasn’t overjoyed with it. There was an element of Groundhog Day, of being bored doing the same things over and over again.
“In addition, I had deliberately corporatised my practice by having a bunch of partners so I would have greater flexibility. But aside from my passion for cycling, I never really took the opportunity to develop many outside interests. So, when the crash prematurely ended my plans for retirement, there was this void in my life.”
Once he was back on his feet, Gray’s first reaction was to refurbish his house. But that only filled in time – it wasn’t a solution.
“I was in a complete fog, not sure which way to go or what was appropriate for me at this stage of my life. So, I just sat on my hands doing nothing, thinking eventually it will come to me, which it finally largely did.”
What helped the process was Gray’s decision to reach out to Jon Glass of 64PLUS who has spent the past decade counselling people on how to successfully transition to retirement. It was only a six-week course, but it helped Gray focus his thinking.
“I guess the first thing I discovered was that I wasn’t alone. Many people, especially men, go through similar thought processes, fears, all of that, when they retire. That was really reassuring because I first thought I was on my own. I saw all these people joyfully retired and assumed that was everyone but me.
“The trouble is you don’t have a frame of reference because retirement is not something people talk about when they’re working, they don’t talk about what it’s like to be retired.”
Gray says much of Glass’s teachings basically reinforced conclusions he had slowly reached.
“It’s a four-step process. The honeymoon stage, then a sense of being isolated – I miss my work colleagues and I’m with this person, my wife, who I hardly know – and not knowing what to do, to asking how to give my new life meaning, and finally, piecing it all together to realise I have all these skills so how can I use them in a different way that feeds back into the community. For me, I suspect it will be mentoring, to passing on knowledge I have acquired to others.”
For Glass, Gray’s journey is not unusual. Many struggle to cope with retirement. He says there are five avenues to retirement – the Hollywood standard (take the gold watch and retire to the golf course), the yo-yo approach (part-time work), the pine box approach (working up to the death knock), forced retirement and the portfolio approach (willing to explore other opportunities).
Glass says: “In my experience, the first two types are unlikely to seek a retirement coach, and the third definitely won’t. I see a lot of the fourth type in my work, while the fifth is the ideal client for 64PLUS. They’re the people we can really assist to find genuine purpose in retirement.”
