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Life after work

What to consider when making a sea change 

22 February 2017

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Money & Life team

Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.

Retirement is a major life change, as is moving to a new place when you retire. Even though you might have previously visited the area you plan to go to, it may have been during a holiday, which is not a realistic test of what living in the area permanently will be like.

Lacey Filipich is a Perth-based independent financial educator. Through her business, Money School, she helps Australian parents raise financially savvy kids; and helps adults understand their finances and make their money “work” so they can retire early.

Although still in her 30s, Filipich has practiced taking “mini-retirements” herself. Her philosophy is that having several major breaks throughout your career is much more enjoyable than waiting until you are “old” to enjoy your time.

What kind of lifestyle do you want – and what can you afford?

Filipich says this is the most important consideration. Ask yourself questions such as:

  • Do you want to travel or stay in one location?
  • Do you have a sport or hobby you want to do?
  • Do you want to move closer to family?
  • What will your total annual income be?
  • Will it be necessary to compromise or “get creative” to achieve what you want?

She says don’t give up on your dreams by thinking you can’t afford living in a certain place until you’ve checked. You may find it’s much cheaper than you think.

Work out the best locations for your chosen lifestyle

If you love to travel, perhaps you can have a smaller “lock and leave” place as your base in a town with good air connections, and your sea change can be more about where you holiday than where you are based.

If you are a golfer, maybe you can move somewhere there are amazing golf courses.

Perhaps you can move to a country or seaside location within driving distance of your grandkids – then holidays can be at your place.

Try before you buy

If you are planning to move to a new area, it makes sense to properly research and investigate before you make a permanent move. You don’t want to move somewhere and realise it’s missing something essential – like good health care, decent shops or facilities for leisure activities.

Don’t just holiday where you’re thinking of moving to ­– go for a couple of months and visit during different seasons. Live as you would when you retire. Work out the cost of living through actually experiencing it – for example, if it’s remote, fruit and vegetables might be expensive, not to mention things like emergency medical care. Don’t let things like this surprise you.

Filipich says you should also consider the implications of a big move on relationships. Will you be able to maintain contact with your close friends and family? Will the move make this easier or harder? Will you have to spend more on travel? If you’re moving away from your network, will you find it easy to make new friends? This is especially important as you retire, as suddenly you’ll have a lot more time on your hands. Being with loved ones can be a great way to spend this time.

Get your financial house in order

No matter where you live, retirements are more enjoyable when there’s a degree of certainty about your income and asset base.

Get clear advice on the best way to arrange your affairs. This may include finding the right investment mix for your super and knowing how much pension you can expect (if any). It should also leave you with a comfortable buffer of savings for any emergencies.

And with the federal government’s reforms to super, some retirees may be worse off and no longer qualify for a pension or a part-pension, so it’s very important to “do your sums”.

Consulting an accredited financial planner before you retire is one of the smartest things you can do. They will be able to point you in the direction of the questions you need to ask yourself; some you probably haven’t even thought of.