Australians are living longer and retiring earlier. We could spend a third or more of our lives as retirees. But how far will your super stretch? What kind of life do you want to live? While there’s no arguing that starting to prepare sooner rather than later will help you get closer to your goals, it’s never too late to begin.
Discover the ways you could wind down your working years without feeling the pinch of income loss, or even keep working – but perhaps a little less.
The most pressing concern when you eventually decide to retire is centred on how can you produce an income for the rest of your life given that you’ve just lost the ability to earn a salary.
That one thing that retirees fear the most is ‘running out of money’. It is vital that you do whatever possible to maximise your retirement income and make it last as long as possible.
There are some things you must do to secure your financial future. These include looking closely at your finances, making a long-term financial plan and growing your retirement income.
Once you’ve decided to retire it is critical to work out how much money you have now, how much you might have in the future and where it is coming from.
Therefore it’s important to understand:
- What assets (house, savings, investments) you have and how much they are worth
- How much super you have and when you can access it
- When you can apply for the age pension and whether you are likely to be eligible
Once you’ve done this, then it is essential to make a long-term financial plan, looking at how your needs may change over time. For instance, in the first few years of retirement, you might want to travel interstate or take that once in a lifetime overseas trip. Later, you may want to replace your car or do some minor house renovations and then further down the track; you may want to consider downsizing the home or moving into a retirement village or hostel.
The important thing is to plan for the long term, not just the next five years. This is where a carefully constructed financial plan, which addresses your goals and objectives, is critically important.