In the course of my business and personal lives, I meet many people at different stages of their financial lifecycle and with many different mindsets. The difference in attitudes to retirement living is startling. Let me give you a quick example.

Scene 1: In my days in London, building a business and investing in property, I came across a fascinating woman. We spent an afternoon at a pub on the South shores of the Thames drinking pints and sharing war stories. This lady whom I will call Tamara for the sake of this exercise, had spent years building a business of a women’s only gym in London. She had celebrity relations and a great network of contacts. The business had had resounding success and built upon that for a period, until mis-management from one of the trusted business partners coupled with some extra “entitlements” left the bank balance dry and the business floundering with no life-raft in sight. Tamara did her best to resurrect the business but it was not enough. The business went out the back door, leaving her high and dry as the sole remaining director.

Tamara had sat on the sidelines for a number of months, emotionally and physically recovering, doing bits and pieces type work while planning her next move. After 18 months out, she felt she was ready to tackle another challenge. With a little over 10 years left until the earliest age of retirement in the UK system, there was plenty of time left to make a go of it.

We discussed a business opportunity that would allow her back on her feet and the taste of success again. Products: all good. Entry cost: Can make it work. Structure: no problems. Business plan: yes, firm direction in place. Equity share: yep, that works. All systems were go. Except…. “If I make this sort of money, it will affect my pension entitlement. It’s not worth it.” Wait a minute? Are we saying that you don’t want to work toward a business goal that would provide stable income (of many times the pension amount) for the working years and a saleable asset on retirement because it will affect the 230GBP per week the Government will give you for doing nothing? “Yep.”

Hmmmmmm. Not sure where to go with that one, back away slowly with palms raised. Needless to say, we never signed the paperwork to get involved on a business level. Back to the pub for more pints maybe.

Scene 2: Back in Australia, ah, love it! A bit more normality, or is it? I was having a conversation regarding retirement, pensions etc with a relative by marriage. Although still in the prime of life (still is of course!) Julie (name changed to protect the innocent) has some pretty definite ideas of how she will be retiring. The current pension income for a couple? $26,000 per year.

“What? $26 grand a year? That is what I want to be spending on red wine, not living on it!”

After clarifying her drinking habits, Julie wants to be “drinking the good stuff” in her later years – not purely a volume proposition! At $70 a bottle, sharing a bottle a night, Julie and her husband will manage to enjoy that “pension money” in style.

Julie and her husband are currently earning good money and have made a few personal investments along the way, while boosting up their Super balance through concessional contributions and taking a personal interest in the direction of their fund.