Five money tips for planning the grey nomad lifestyle
Do you have a retirement bucket list? It seems many Australians do, with over half the population compiling a list of all the experiences, adventures, holidays and achievements they wish to accomplish in their lifetime.
The research by Rest Industry Super found that out of the 1000 people over the age of 55 it surveyed earlier this year, one in two had a bucket list. Top of their list? Travel! While many wanted to go on once-in-a-lifetime adventures to places like the US or Brazil, 43 per cent want to go on a road trip. With long stretches of road, isolated towns and geographical diversity, Australia is one of the best places in the world to live and go on a road trip.
The tradition of grey nomads is strong and proud in this country, with the number of grey-haired retirees packing their RV and taking to the open road growing each year. And why not? It’s cheaper than flying overseas, you don’t need to squeeze yourself into your economy class seat while getting your elbow bumped by the refreshments cart and, most importantly, you’re seeing more of the beautiful country you call home. However, it can also take a financial toll, so you need to be prepared to ensure you’re not worrying about money while trying to take a photo of Uluru.
Helen Baker, a Brisbane-based financial planner and author of On Your Own Two Feet: Steady Steps to Women’s Financial Independence, says grey nomads have slugged it out in workplaces and raising a family to enjoy the fruits of their hard work, but if you’re not financially secure, the dream may stay as just that – a dream. She suggests developing a financial plan for those who are looking to live the grey nomad life for at least 12 months.
“I love that retirees are fitter than ever and more adventurous. Those who do the ‘grey nomad’ life well retire with finances to support their ability to trek around this beautiful big nation and still ‘live’ when they decide it’s time to settle down,” she says.
“Grey nomads appear to have proudly taken a decision that they are not going to pass on all their money to their kids. They have worked hard all through their lives, walked through the recession with gritted teeth, raised and educated their children; now they want to enjoy the fresh air, the beauty of Australia, enjoy living and be adventurous.”
When developing a financial plan, Ms Baker suggests planning as far in advance as possible, with some of the following key things to consider:
- Investigate the transition into retirement scheme, allowing you to reduce your work hours and have more ‘fun’ time, easing into retirement.
- Think about contributing more into your superannuation in your last few years of working. It’s an effective way of forced savings with tax benefits.
- Calculate how much money you’ll need on the road. You may want to pick up part-time work. How much could you realistically earn? There’s plenty of work around for grey nomads.
- If you do a stint of fruit picking on your journey, know how that will affect your pension and tax.
- Have you allowed for the grey nomad ‘toys’ – the caravan or motorhome, the 4WD, the boat? How will you fund those?