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We spend over half of our lifetime slogging it out in the workforce, so it's no surprise that most of us dream of retirement and the chance to kick back, relax and enjoy some much earned 'me time'.

Yet as the prospect of retiring draws closer the thought of what to do with all that free time can start to feel a little daunting.

Aside from the obvious financial changes, the move into retirement represents a fairly drastic change of lifestyle. You need to consider not only how your finances will be managed, but also how you will handle not having to go to work each day and what you’re going to do with your free time, now that you have so much more of it.

It’s not always smooth sailing

One of the biggest selling points of retirement is that it gives you the chance to enjoy many of the things you may not have had time for up to now. For some people this transition will be smooth and welcome spent doing things they’ve always dreamed of. But for others, whose sense of purpose and source of social interaction is intimately linked to their job, the change can be unsettling and less than ideal.

It’s important to have a plan

As with most things in life, it pays to have a plan. You might not stick to it, but putting some thought into how you will spend your time can help reduce the risk of boredom or loneliness. For some people retirement can provide an opportunity to undertake further study, take up a new sport or hobby, volunteer for a not-for-profit organisation, train for a marathon, mentor a young person or travel somewhere new. Whatever takes your fancy, having a new area of focus after retirement makes the transition easier in many ways. Doing something of value provides purpose and the new networks you build can replace the social interactions you enjoyed during your working life.

Easing into the transition

When it comes to making the actual transition there are a number of different approaches. Some people retire at the earliest possible age, finishing work one day and entering retirement the next.

Others prefer to make the move gradually, perhaps moving to part-time employment for a few years before stopping work altogether. This can be a great option as not only does it mean you will continue to receive a wage, it also means that you can continue to benefit from the social aspects of a job. In addition, you’ll have some free time to start pursuing the activities that will take on more prominence once you reach full retirement.

Your super can help

While the idea of working less is definitely appealing, part-time work usually also means a part-time wage - not exactly ideal when you still have bills to pay.

This is where your super can help.

With a superannuation transition to retirement strategy, you can access your super while you’re still working as long as you've reached your preservation age.

How does it work?

You can take advantage of the transition to retirement option by rolling the money in your super account into an income stream. Once you've done that, you can start receiving regular payments from your super.

This means that you can reduce the hours you work without sacrificing your lifestyle since your salary is supplemented by regular payments from your income stream.

Alternatively, you can continue to work full-time and use the additional income to enjoy life's luxuries. Or you could reap the tax benefits of salary sacrificing more of your wage into super (effectively paying the 15% contributions tax rather than your tax-rate) and continue to build your retirement nest egg.

Not all superannuation funds offer income stream products. If yours doesn’t and you like the sounds of ‘transitioning to retirement’ it’s worth shopping around for a fund that does.

Feeling confused? Help is out there

Opting to take a slower route to retirement can help you gradually adjust to one of your biggest lifestyle changes. However, it goes without saying that if you are faced with such decisions it pays to seek the advice of a trusted independent financial advisor. A financial advisor can put in place a financial plan that takes into account your needs and wishes, while taking into consideration all the government rules and regulations that may work to your advantage.

When you are discussing your financial plan it’s also a good idea to consider your lifestyle plan as well. Because how you choose to spend your time is just as important as how you choose to spend your dollars.

What’s my preservation age?