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Retirement Planning Guide

Retirement Planning Guide

Achieve more options for the lifestyle you want in retirement

What Does the Ideal Retirement Look Like?

The answer to the question “What does the ideal retirement look like?” is different for everyone.

Some people may want to sell up and become a grey nomad, others may want to continue living in their family home and take overseas trips every couple of years, or some may want to downsize their home and use their retirement to help out with grandchildren. Whatever your ideal retirement, it needs to be considered and quantified so that the running costs (i.e. how much it will cost to fund your retirement lifestyle) can be calculated.

Retirement is a time in our lives when we should be able to spend our time doing the things that we enjoy. It is the reward for working hard all our lives. It is great to have plans and expectations for retirement, but to be frank, if we don’t have the financial means to support ourselves during retirement, then some of those plans may never come to fruition.

How Should I Plan for My Retirement?

Putting money away into superannuation is the best investment vehicle for retirement. However, it is not the only strategy. Some people consider selling their family home and downsizing, others invest in property throughout their lives in order to provide an additional retirement nest egg. For others their superannuation might not be enough on its own and they will need to access their superannuation, the age pension and other personal investment assets to fund their retirement. This is known as the three-pillar strategy. In consultation with a CERTIFIED FINANCIAL PLANNER™ you can strategize and plan how best to fund your retirement.

When Should I Start Planning for My Retirement?

It is best to start planning for your retirement as soon as possible; now really. The sooner you start, the easier it is to achieve your goals. Long term investing will allow for compound interest and will help your money go further.

Will I Have Enough to Retire On?

Lump sums at retirement required to support a “comfortable” lifestyle, according to the Association of Superannuation Funds of Australia (ASFA):

  • A lump sum at retirement of $690,000 for a couple and
  • A lump sum at retirement of $595,000 for a single person.

However, what the ASFA considers a “comfortable lifestyle” could be quite different to what you are accustomed.

Budgets for various households and living standards for those aged 65-84:

  • $69,691 for a couple per annum and
  • $49,462 for a single person per annum.

Another way to estimate how much money the average person or couple will need yearly for retirement is to calculate 60-80% of their pre-retirement annual income. But, once again, these are just estimates. It is important to thoroughly consider what you want your retirement lifestyle to consist of and plan from there – as already mentioned, your comfort level could be considerably different to the next person.

Use our retirement income estimator to see how much money you might be living off in retirement.

Why Do I Need an Estate Plan?

Estate plans help ensure that your assets are appropriately transferred to the heirs of your choice. They can help minimise taxes, transfer costs and reduce family disputes. Although not an enjoyable task, it is important that you consult your financial planner and solicitor on how to best transfer your estate upon your passing. For more information see our estate planning guide.

Get Expert Advice

Many Australians are concerned about their futures. According to MLC white paper 2016 – ‘Close to three in five (56%) were concerned about being able to maintain their lifestyle in 10 years’ time, with those aged 50–70 (61%)—who are more likely to be either already retired or approaching retirement—more likely to worry about being able to keep the same lifestyle’. Seeing a financial planner can help alleviate the stress, it can make a significant difference in the quality of life after work.

Act sooner rather than later. Seek advice from one of the expert financial advisers at Elliot Watson Financial Planning. Contact us for an initial consultation on 02 4038 1623 and find out how we can help you achieve your financial and retirement goals.

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