Australians are living longer and retiring earlier with many people now spending more than a third of their lives in retirement thanks to advances in modern medicines and procedures. The biggest concerns that many retirees face are:
Whilst acting on these concerns are best to be done as early as possible, it is never too late to begin.
In order to have a successful retirement, there are a few matters you will need to address including:
Where to start?
Once you have made a decision to leave the workforce you are going to need to work out how much money you have now, how much you might have in the future and where is it all coming from.
Your starting point:
Putting together a plan:
Your next step is to work out what your lifestyle in retirement looks like? How much do you need to actually live on? Are there any discretionary expenses you would like to include like travel or renovations to the home? Are you planning to downsize at some stage? Will you be providing some sort of financial support to your children or grandchildren eg deposit for a home or paying for education?
It’s important to start drawing up a roadmap not just for the next 5 years but a long-term plan because remember, you are now retired and won’t be able to add to these funds if you are no longer working.
Keeping your plan on track:
Longevity risk is possibly the biggest risk that retirees face. This is the risk that you outlive your retirement funds. It’s critical to review your plans regularly to ensure that you are still on track and communication is key. Should your plans change you will need to make changes to your investments to ensure that you don’t run out of money and to maximise your retirement savings.
Some strategies may include:
The building blocks at this stage in life include: