Executive Retirement: Planning for your ‘New Normal’
Wealth Management Solutions | Specialist Advice Solutions

Anne-Marie Tassoni, Partner - Private Wealth Management

In today’s landscape, the realm of retirement has become largely self-guided. For many, this first taste of complete autonomy, after years of being driven by the scarcity of time or money, is liberating. However, the wealth of options that exist beyond the office doors can too be paralysing, leading to decision fatigue.
Posted 07 March 2024

In the absence of retirement planning, one may revert to default choices or opportunities immediately presented, inevitably falling short of the fulfilling, engaged lifestyle they dreamed of designing. To thrive in this new life stage, planning is pivotal and setting aside the time and headspace well in advance will get you further on your way to the retirement you want.

A lack of retirement preparation can substantially hinder your financial security. Without a strategic plan, the inherent uncertainties surrounding financial decision-making (economic management, structure, and longevity risk) are amplified.

A sudden market decline just prior to, or in the early stages of retirement, can have significant and long-lasting consequences on the viability of your wealth over the course of your retirement. Additionally, persistent inflationary pressures can significantly erode purchasing power and, therefore, the ability to sustain a lifestyle with which you were once accustomed. Ill-considered structuring can also impact the tax effectiveness of hard-earned savings, particularly for executives who are subject to the highest rate of tax.

Financial risks aside, psychological and physiological risks are likewise high during this transitional life stage. While the idea of ‘slowing down’ sounds appealing, some executives who have built and led fast-paced, social and intellectually stimulating careers for decades will find an abrupt end to this standard unsettling, perhaps even distressing.

Delaying retirement planning can heighten anxiety about what lies ahead or keep you on the hamster wheel for longer than you would like in fear of not yet being financially secure enough to retire. There is no “right” age, stage, or milestone to start planning; however, research(1) suggests the process should start at least two years before expected retirement.

Whilst you may be working until your very last day on the job, without a plan, you are depriving yourself of the prospect to explore low-risk interactions and plant the seeds of new and valuable opportunities. Forward-thinking and preparing ahead is also pivotal from an emotional standpoint, to ensure the fear and uncertainty that can arise from the onset of retiring, is replaced with facts and knowledge.

One of the biggest challenges of retirement is detaching yourself from the corporate identity you have grown to embody as a full-time executive. Despite the reputation, awareness, and prestige of your role at the conclusion of your career, transitioning to this next life stage requires a reassessment across all areas. Whilst it is difficult and may seem self-deprecating, it is necessary to turn the page and start working on the new chapter of your life.


Avoid the six-month rule

Whilst executives are often told not to commit to anything for at least six months into their retirement, this can sometimes result in an abrupt and unintended return to the professional world.

With an empty calendar, a silent phone, the sudden absence of activity can lead to feelings of boredom, emptiness, and a loss of self-worth. As expected, many find themselves making an emotional decision to fill this short-term void and take whatever immediate opportunity is presented after six months.

Instead, be open to trialling an array of potential opportunities. This will allow you to dip your toe in the water, learn more about yourself and explore new activities you have always thought you would enjoy. Start by experimenting with low-risk opportunities, test your assumptions and validate whether these activities are as satisfying as you anticipated.

Be ready to rebuild your network

Relying on your past network can distract you from the critical task of building a new one. It takes both a conscious decision and effort to form new connections, but is every bit as valuable as those which existed in the workplace.

Reach out to multiple communities of people with similar personal, professional, or philanthropic interests. It can also be extremely valuable to connect with and learn from peers who are further along in their retirement journey.

You will need to be proactive, however, as it is necessary to facilitate interactions and create new opportunities for connection and serendipity. Be as driven as you were in your young professional days; the most fulfilling opportunities will not be found waiting for the phone to ring.

Don’t narrow your focus

Whilst it may seem unnerving to veer from common paths, relying on default options such as joining corporate boards can often be quite tedious, long-winded and are unlikely to fill your executive leadership void.

Before you commit to any long-term engagements, expand your list of options to include less common paths: mentoring and coaching students or young professionals, seeding start-ups, learning a language, travelling to a new country, checking off a bucket list item – anything!

Cameron Harrison is in the business of mapping strategy. However long it may be or however many avenues travelled, it’s a journey where our expert Partners’ insights and experience are vital in helping our lifelong clients – from their ambitious beginnings, to the corner office and later to the 19th hole.

Achieving success in your individual journey occurs not only through thoughtful planning, but also diligent and excellent execution of the details. Through our ‘plan for peace of mind’ process, we work together to identify your personal goals, needs and risks, prioritise your critical factors and devise a clear and actionable route-map towards achieving those goals. The plan of action can include consideration of investments, asset and liability review, superannuation, multigenerational considerations, tax, asset protection, and risk analysis.

Speak to one of our advisers to learn more: am.tassoni@cameronharrison.com.au

Sourced from:

(1) Harvard Business Review; Photo by iStock