Tuesday, March 15, 2011

Lifestyle Strategies 15 March 2011


For many people, work provides meaning, significance and social relationships.

But once we stop work, will there be meaning, significance and social relationships available to us?

To evaluate your situation, try this retirement planning exercise.

Draw a large circle and write the names of 10 people inside the circle who you are genuinely close to. Don't include any relatives, as they have to love us, and although our connections with our families can be very nurturing, it is friends who help validate us and widen our horizons.

Now cross out any of the 10 names you know through your work, which might eliminate half or more of the people you listed.

You need broad social networks in retirement to maintain your meaning and purpose.
Studies show that retirees without a social network say their close friends dwindle to an average of about nine people.

And as a result of their isolation, people like that often deteriorate quickly and die relatively young.
Acknowledgements: David John Marotta writing in The Daily Progress 8 March 2011


When we address the question of retirement planning, rarely do we seriously consider when our “estate event” will occur. We only know that it will occur – someday.

For us, it’s not the life expectancy tables that are of interest – they relate to a child born today – rather we are more interested in the probability of living to a certain age.

And to summarise, for a married couple aged 65, the probability is 33% that one will live to age 92.

Or for a man aged 60, the probability of him living to age 90 is 37% and for a woman – same age, living to age 90 – the probability is 53%.

This longer-life expectancy is great news – but it also means that you should prudently plan for a retirement that could extend to your hundredth birthday … and perhaps beyond.

That means more funding for a longer time. Take this example of a woman who retires at age 65, puts her retirement savings into investments held within a super fund that earns 6%, and draws $3,000 each month (without indexing). Ignoring taxes, she would need to have $375,425 to last until age 80. However, if she needed income to age 100, she would need $543,160 when she retired.

Of course, if she took into account inflation and the diminishing purchasing power of her monthly $3,000, then she would need to start with far more.

Here's another factor to consider: 65 is no longer considered as the 'normal' retirement age. The retirement concept you choose will affect your retirement income needs, pension plan entitlements, and many other aspects of your financial plan.

Superannuation can save you tax and it can go some way to creating a retirement income. But there are regulations limiting the total amount you can contribute and it is unlikely your super alone can deliver the level of income you'll need for 20-25 years of comfortable retirement.

And as you know, my solution for this unsolvable financial issue is that you shouldn’t delay in building a portfolio of residential investment properties. Then at least you’ll have options.

Acknowledgments: Bob McCormick, Tillsonberg News, 2 March 2010


We are all somewhere on this scale.

Where are you?

Imagination (15-6 years before retirement) covers the initial and growing focus on retirement planning.

Anticipation (up to 5 years before retirement) includes increasing excitement and last-minute anxieties and doubts.

Liberation (Retirement Day and the year following), the "honeymoon" phase of retirement, is characterized by its brevity.

Reorientation (2-15 years after retirement), occurs after some degree of let-down, when people adjust their priorities, activities, relationships, and lives.

Reconciliation (16 or more years after retirement), is a phase of relative contentment, hopefulness, and acceptance.

Source: Ameriprise Financial, "The New Retirement Mindscape" 2006


Intrigued that numerous academic studies into the relationship between money and happiness report a very low correlation, researchers at Stanford University examined 60 academic studies, then tried to draw links between those findings to draw more general conclusions.

The results? Here are five guidelines they say anyone can use to increase their happiness.

1. Spend time with the “right people.” Sounds simple. But who exactly are the right people?

Unfortunately, they’re generally not your office mates, who are the ones people tend to spend the most time with. The people that make you happiest will generally be friends, family, and romantic partners.

2. Spend time on “socially connecting” activities, such as volunteering and spending time with friends.

• Work doesn’t count because it’s generally one of the more unhappy parts of the day. And travel to and from work because we generally do that in isolation.
• Volunteering has been proven to be a good way to increase happiness.
• Memory is important, because it helps us take an event that happened in the past and extend its ‘worth’ into the future. Look back and then plan similar happy events in the future.

3. Day dream, or, as the researchers say, enjoy the experience without spending the time.

The most common example is holiday planning, which some find more pleasurable than the vacation itself.

4. Expand your time.

Here are a few techniques
• Breathe slowly. Just for a few minutes.
• Volunteering makes it seem like you have more time. In general, spending time on someone else makes people feel like they have more spare time and that their future is more expansive.
• Pay people to do the chores you hate. Then use the time you’ve ‘bought’ not to catch up on work, but to do something you genuinely enjoy.

5. Be aware that aging changes the way people experience happiness. Youths tend to equate happiness with excitement, but as people get older, happiness is associated with feeling peaceful. Young people get more happiness from spending time with interesting new acquaintances, while older people get more enjoyment from spending time with close friends and family.

Acknowledgements Kimberly Weisul writing in Bnet 3 February 2011


You know that I think that super is inadequate to fund 20-25 years of comfortable retirement, but at least Paul Keating – who introduced the compulsory super contribution in 1992 – tried to anticipate the future.

But look what has changed over the past two decades – mobile phones were then as big as a shoebox, the internet didn’t exist, airfares were expensive, petrol was only 35 cents a litre, old age medical care didn’t seem particularly expensive, and you had to go to New York to watch cable TV.

Futurologists back then were still thinking that the pension would be your principal income after retirement, as it was at the time. Somehow the surge of baby boomers and extended life expectancies didn’t get a hearing, and John Howard, when he limited the employer’s contribution to 9% in 1996, thought everything would be OK


Planning for a comfortable 20-25 years of comfortable retirement would be much easier if we had a crystal ball. But here is what we can do:

Anticipate that there will be new technologies. While they doubtlessly will enhance our lifestyle, the trouble is – they will be a user pay technologies.

Expect to live a long time.

The probabilities that you will reach age 90 are quite high.

Expect inflation.

Increases in the cost of living have been modest for some years, but there is no certainty that inflation has gone for good.

Expect to live without the pension.

The time is coming when the government will find that it’s paying out more in pensions than it can afford.

Consequenlty - Be Proactive

We don’t know what the future will hold.

All we can do is tuck aside as many investment properties as we can (they are inflation protected) to give us many more options that we have now.

If you would like me to help you explore your options for 20-25 years of comfortable retirement, feel free to contact me – Bernard Kelly – anytime. My mobile is 0414 778 518


Many pre-retirees don’t understand the impact of inflation. The reason is that wages rise to neutralise the impact of inflation while you are in the workforce.

The basic fact that if annual inflation is 3% on average, in just 10 years a retiree will need to withdraw 30% more money, or more than $65,000, from their nest egg to purchase the same goods and services that cost $50,000 today.

And much more disturbing, in 20 years that retiree will need to withdraw 80% more, or $90,000 to maintain today’s lifestyle.

The best defence against inflation is property.

Inflation can be expected to be with us forever, and wages will continue to rise. Consequently rents will continue to increase, and so a property investor can consider that they will be protected against inflation.

If you would like to discuss this solution in more detail, feel free to contact me – Bernard Kelly – anytime. My email is admin@retirelaughing.com


I can be accused of commentating that your retirement will be very uncomfortable unless you invest, but take heart – things could well be OK for you.

• Remember there will always be a pension (in some form or another) so you won’t ever be actually destitute.

• Remember that many necessities are actually luxuries – such as the second mobile phone, the second car, birthday presents for adult children, cable TV etc.

• Remember that humans are adaptable, and we will adapt to whatever conditions we find ourselves in.

• Remember that Happiness has very little relationship to how much money we have.

However, having said that, you will doubtlessly experience a more comfortable retirement if you do invest now. In particular, as our bodies deteriorate as we age, we’ll need substantial capital to ease the issues that will then emerge.

So contact me – Bernard Kelly – without any further delay. More email is admin@retirelaughing.com Let me help you explore your investment options.

An appropriate quote: “I’d rather regret the things that I have done, rather those that I haven’t done” – Lucille Ball


If your pension is inadequate, if your retirement funds have been stolen or if you think the cost of care in an old peoples’ home is unaffordable, consider this option: Prison.

Radical? Unreasonable? Mad? But just listen to the advantages:

There will be no need to buy clothes, your days will be spent lounging in your room with dedicated time outdoors. Then you’ll have three square meals a day. Plus an extensive library with internet access, and free gym membership.

And, best of all, the most comprehensive health care coverage that money (but not yours) can buy.
Is this a vacation in Surfers’ Paradise, or at a low security prison in the countryside?

The only question is – what is the entry price?


You can now buy my manual “37 case studies of Profitable Hobbies for immediate application” at

At $19.75, it’s excellent value if you think you’ll be needing an additional source of income at some stage.


My blog is at www.retirelaughing.com/blog
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Bernard Kelly www.retirelaughing.com mobile 0414 778 518 cell phone 61 414 778 518

About Bernard Kelly:
Bernard Kelly BEcon MBA CRPC Australia’s Retirement Strategist®, is a highly sought-after advisor, retirement authority, thought-leader, author and radio commentator because he makes the complicated and mundane topics of investing and retirement fun! Bernard has over 20 years’ experience providing families with financial thought. He is the author of Live Your Dreams in Retirement, Property Investing for Couples, Goolwa by Breakfast and Raising Decent Kids into Substantial Wealth and publishes a fortnightly newsletter that reaches thousands of subscribers worldwide.

19 Prospect Street, Box Hill 3128 Australia. Tel 61-3-9899 8577 mobile 0414 778 518

“expect to reap an extra $449,999* when you’ll really be needing it”.

PPS As I don’t spend my advertising budget on traditional media, I’m able to pay you $1000 for successful referrals