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Getting retirement ready is something that anyone can work on, however many leave it too late. Often this is because they don’t fully understand what needs to be done and how to do it.
Retirement planning looks different for everyone and can encompass a broad range of topics from saving for retirement early on through to accessing your superannuation when the time comes.
Preparing for retirement can begin as early in life as you like. You need to think about how you are going to fund your retirement and the best starting point is by working backwards. Start by determining how much income you think you are going to need each year in retirement. Obviously this isn’t going to be a perfect answer but it is an important step in the planning process.
Once you know how much you will need each year it’s time to think about where it’s going to come from. There are multiple options and many go hand in hand. You may be looking at age pension, superannuation, income from other investments you have made, part-time work, downsizing or a combination of the above.
The hardest step is determining whether or not you are on track. This requires putting together your age, income, superannuation balance and contributions, any investments, your house value, your total debts and a range of other variables such as when you would like to retire. Once you have all of these detailed, you must then analyse them together and perform a ‘health-check’ which will basically show you what you are on track to getting.
If you are not on track to where you want to be, the good news is that there is a lot you can do to start maximising what you have. Starting an investment plan, adding more to super, changing your investments, reviewing your home loan and your insurances – these are all things to start considering to help you improve what your life will look like when you retire.
It’s important that you consider your position as a whole as many of these areas affect each other. As an example, how much superannuation and investments you have will have an impact on how much age pension you are entitled to.
Finally, there are also more complex strategies to help you take advantage of the tools you have available such as Transition to Retirement strategies.
Whichever path you take, the best time to start preparing for retirement is today.
General Advice Warning
This information may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice provided as part of this information, having regard to your own objectives, financial situation and needs.
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