Retirement: a radical change!

two elderly woman looking at a dyed paper

April 27, 2021

Retirement is a radical change, there are no two ways about it. All of a sudden, you might find yourself with a lot of free time that you hadn’t had for decades. This can be stressful for some people as we’re all creatures of habit. Having one of the most important habits broken up all of a sudden can have an impact on our lives. However, this frees up a great variety of options. You’ll have to ask yourself questions about which way to start heading now. Do you want to travel, do you want to finish some projects or start new ones? Do you want to find a new hobby or spend more time at older ones? 

If you want to learn how to properly handle this, keep reading the article!

Whether you retire at 62, 64, or 65, many things change: giving up gainful employment, more time for hobbies and a new financial situation. The focus is on early planning of activities and a realistic budget.

Retirement is a drastic change in every life. From one day to the next, everything changes! You can sleep in, let yourself drift … and get terribly bored. Finally, you can start new projects or finish ones you’ve already started without time pressure. However, without time pressure, you can also sink into lethargy because you lack a regular daily routine and thus the necessary structure. Finally, you can also put everything off until tomorrow and let yourself drift without goals and a purpose in life. If you have also gone through life without planning and budgeting until now, the time at plus/minus 50 is ideal to start. Especially since it is anything but witchcraft. And don’t worry: you are not alone with this problem. Very few people think about retirement at the age of 40 to 50. But if you want to really enjoy the best years of your life, it is worthwhile to deal with topics such as health, living, hobbies, relationship network, meaning of life, and finances early on.

A milestone birthday, a trip around the world, or a new car?

Just having a budget helps to think about the basics together with your partner. What is the current monthly income – and what will it look like after the retirement of one or both partners? And what fixed expenses will remain after retirement? One thing is quite clear: your budget will look different after retirement than before.

Do you have a reserved item? “For what?”, many ask, stressing that they already live frugally and want to spend even less in old age. But hand on heart, you are only lying to yourself that way. Just think about the wedding of the children, about

You can also think about a new car, urgent investments in your house and garden, hobbies such as photography, golf, cycling, or that long-awaited trip around the world.

Don’t forget one thing: the purchasing power of your income decreases over the years: Although the AHV provides for inflation compensation, the 2nd pillar does not have an automatic adjustment. And your assets are also exposed to monetary devaluation. If you are still physically and mentally fit and want to continue working beyond retirement age, you can also postpone your pension. While the pension is reduced by 6.8 percent per year in the case of an early withdrawal in the case of early retirement, it increases in this case. The increase for five years is 31.5 percent.

Big house – or smaller flat?

A central issue for homeowners: Should they continue to live in their large house in old age, even though their children have moved out? Often a change to a condominium is not only more practical but also financially more lucrative. Under certain circumstances, a smaller main residence and a holiday home are now possible. Clever timing of mortgages also saves trouble and costs.

Be careful with your health insurance. If finances allow, it is best not to cancel any supplementary insurance policies in old age. After all, infirmities increase with age. And then it is reassuring if at least the financial aspect does not cause any stomach ache. The high costs of dental care are often underestimated. And no one wants it, but in old age, there is often no choice but to go into a nursing home. This is expensive and can sometimes force homeowners to sell their former homes in order to pay the nursing home costs with the proceeds. To prevent this from happening, homeowners can bequeath their property to their descendants in advance, but continue to live in it. In this way, the parents cannot be forced to sell their home because it no longer belongs to them. In this case, the legal options are usufruct and right of residence. In good time, one should also take care of the property and inheritance law issues so that in the event of the death of a spouse, one’s own wishes can be taken into account and lengthy costly inheritance disputes can be avoided. This also includes a living will and powers of attorney on existing bank accounts and contracts.

Self on the stock market – or monthly pension?

And what to do with the assets? Have the pension fund amount paid out and invest it yourself? That is tempting. But be careful: If you have never actively invested your money before the age of 65, you will not suddenly become an investment specialist as a pensioner. In addition, many retirees underestimate their investment horizons. According to the latest statistical figures, men can expect to live for a good 15 years after retirement – women even for more than 20 years.

It would be a shame if you couldn’t enjoy this time to the full. After all, you have worked hard for most of your life and looked forward to this moment. With a bit of planning and a skillful course set at an early stage, this can be achieved in the best possible way. One piece of advice: The easiest way to do this is to get tips and tricks from experienced advisors in the areas of living, medicine, holidays, and finances in the company of like-minded people. This way you can exchange ideas with interested people who, like you, are also a few years away from retirement – and at the same time benefit from the knowledge of professionals. It’s that easy: Go to

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