Can you afford to retire when you want?

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If you want to retire by a certain age – now is the time to start working to make that happen! It doesn’t just happen overnight.

Retirement planning should never be an afterthought. It plays too vital a role in your life to be continuously put off, ignored, or done poorly.

Some people experience a lot of anxiety about not having enough money to support them through retirement. Other people just don’t consider it at all and unexpectedly find themselves in a difficult financial situation later in life.

Simply making a realistic and workable retirement plan can help to alleviate those problems.

It’s not too early to start planning for retirement. The sooner you begin, the better prepared you’ll be, and you will be more likely to enjoy financial independence throughout your golden years.

So here are some guidelines on how to start planning for your retirement…

As always – this is general advice only – please speak to your tax agent if you want to discuss your retirement plans in more detail!

1. Appraise your finances.

Look at your current financial situation and ask yourself questions that will guide you through planning your retirement.

What assets do you have and how much are they worth? This includes your house, your savings, and any investments you have set up.

How much super do you have, and when can you access it?

When can you apply for the age pension? Are you likely to eligible?

Look at your different sources of income. Can you organise to use these different sources to fund you at different stages of your life?

Based on your financial situation, when can you realistically retire? Is that in line with when you want to retire? If not, bridging that gap might mean making some decisions about budgeting and compromising.

If you’d like professional help with this process, you can book a free financial health check with Aintree Group Wealth to get you asking the right questions and thinking strategically about your long-term financial health.

2. Adopt long-term thinking.

You must be looking at the rest of your life, not just the next five, seven or even ten years.

Take a look at your lifestyle
Can you realistically sustain that into retirement?
Will you have to change certain things about the way you live?
If so, when you do need to make those changes? (The answer is probably sooner rather than later).
What are you not willing to compromise on?

How will your needs will change over time?
You may want to travel after retirement. You may find you spend more money on funding hobbies, activities or social events.  And there is always the looming issue of potential health problems that may come with a big price tag.

3. Optimise your retirement income.

Set a budget.
Assess your financial situation and create a realistic budget to stick to. Income sources such as superannuation offer are finite. If you don’t calculate your savings and spendings properly you could burn through it all in a very short space of

Reduce debt.
It’s important to make an effort to pay off debts quickly now, so they do not linger into retirement and cut into your finite income.

Consider alternative sources of income.
Leaving your money in the bank and assuming it will earn enough interest to keep you going isn’t necessarily the best option. You can consider other options such as investing in assets that will grow over time, like property or shares.
However, make sure do you do research, identify the risks, and avoid getting caught up in the hype of “get rich quick schemes”. It’s always best to ask for professional advice from a financial planner, to ensure you’re finding the right balance on risk and reward.

Use concessions
Take advantage of entitlements like Seniors Cards that will give you discounts, it will help you stick to your budget.

Transition out of work slowly.
The best way to increase your retirement income is obviously to retire later so you can keep saving. If that’s not an option, consider moving to part-time work, and then slowly transitioning into retirement.

Take control of your super.

Superannuation is all about building long-term wealth that will support you financially in retirement. A Self Managed Super Fund (SMSF) is a private super fund that you manage yourself, as opposed to putting your superannuation in an industry or retail fund such as REST, CBUS or Australian Super. SMSFs aren’t necessarily suited to everyone’s circumstances, so we recommend you chat to an experienced SMSF accountant or financial planner if it’s something you’re considering.

4. Consider other factors.

What other things could impact when you want to retire? Something many people don’t take into account when planning for retirement is their mental health. Some people experience loneliness, boredom, depression or anxiety during retirement. Make sure you acknowledge that you may face those feelings, and consider how you might be able to overcome them.
There may be a monetary cost in staying socially active and keeping up with weekly activities, but it can have a huge impact on the quality of your retirement.

Who are the other people involved in your life that will be affected by your decision to retire?
If you have children, how old will they be when you plan to retire?  Early retirement might mean you’re forking out for school fees on a limited budget.
What will happen if your partner, or one of your children falls ill and needs expensive medical attention?

5. Get professional advice.

Many professionals such as tax advisors, accountants and financial planners offer tailored retirement planning services. Speak to someone who can talk you through different strategies for budgeting, saving money, investing and other financial planning matters.

If you want to talk to us about our retirement planning services, please get in touch!