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For some retirees, working a critical part of their golden years

Financial planner Helen Nan is finding many clients want to stay in the workforce, either working part-time or taking up a new business venture. It keeps them involved with their communities while enhancing their mental and physical heath.
Retirement

Retirement is often seen as a time to relax and enjoy the rewards of decades of hard work. Leisure activities, grandchildren, sport and travel take over as life’s priorities. But this traditional image of retirement is evolving, as Helen Nan, Brisbane-based financial planner and founder of Compound Freedom, tells The Golden Times.

She says more retirees are embracing what she calls active retirement where they either continue part-time work or pursue a sideline activity such as running a small business. Citing the examples of Wendy and Bill, Nan says they typify many couples or individuals who are turning their golden years into a period of fulfillment, new learning and joy.

“At 70, one of my clients, Wendy, could have chosen to retire fully and rely on her savings and superannuation. Instead, she continues working two to three days a week at David Jones, a role she finds rewarding. This approach offers significant benefits, not just financially, but for her health and personal relationships,” she says.

  • Active retirement can be a powerful tool for extending financial resources, Han says. One key advantage is the ability to delay or reduce withdrawals from retirement savings, so Wendy’s decision to keep working part-time enhances her financial situation.

    “Although she receives a partial age pension, her income from David Jones allows her to avoid drawing down her superannuation, letting her balance grow. This strategic approach reduces the risk of outliving her savings, a common concern among retirees.”

    The Work Bonus scheme supports and rewards pensioners at pension age who work by allowing them to keep more of their pension. Under this scheme, the first $300 of fortnightly income from work is not counted under the pension income test.

    From July 1, 2024, the pension income free area is $212 a fortnight for single pensioners and $372 a fortnight for couples. This means a single pensioner with no other private income can earn up to $512 a fortnight from work and still receive the maximum pension entitlement.

    Nan, who authored Your Best Life, says 63-year-old Bill recently stepped down from his engineering role and, as a self-funded retiree, is now planning to start a side business as a driving instructor. Having taught his three children, who he says are excellent drivers, Bill is confident in his ability to help others become good drivers.

    Nan says staying active in retirement keeps the brain engaged. Running a business and solving problems can help maintain cognitive function, reducing the risk of dementia and other age-related cognitive decline. It also provides retirees with a sense of purpose and direction, crucial for mental well-being.

    “Having something to look forward to and work towards combats feelings of loneliness, depression and boredom that can arise after leaving a job, especially if one’s identity is closely tied to their work,” she says.

    A part-time job also keeps retirees physically active, crucial for overall health as individuals age. Wendy’s role at David Jones involves interacting with customers, moving around the store, and staying on her feet for much of the day. This level of activity helps her maintain mobility, strength and endurance, essential for ageing well. The challenges and social interactions Wendy experiences at work keep her mind sharp and alert.

    Key relationships in life often involve spouses, friends and co-workers. For many retirees, leaving the workforce can lead to a loss of work connections, resulting in loneliness. It can also be challenging to spend most of the day with a spouse, straining the relationship.

    For Wendy, continuing to work at David Jones allows her to stay connected with colleagues and customers, providing her with a sense of community and belonging, Nan says.

    “These social interactions are vital for her emotional well-being, giving Wendy a reason to get out of the house, stay active and engage with the community.”

    She says for those approaching or in retirement, these two stories are an inspiring example of how to make the most of this important life stage. Whether through part-time work, volunteering or pursuing new hobbies, staying active in retirement can transform these years into some of the most enjoyable and fulfilling of one’s life.




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