How long your money lasts in retirement depends on how you plan to spend it. Are you planning on SKI-ing – ‘spending the kids’ inheritance’, or do you want to leave a legacy? Once we understand your expectations we can work out if you are going to be able to make them happen or help you with a retirement plan to get there.
Being clear on how much you need to retire is about taking an honest look at issues such as what your living expenses will be. Do you want to stay in your family home or are you thinking of downsizing and putting some money in your pocket that could be invested to provide part of your retirement income? If you are planning to move you will need to account for the cost of this too.
Do you want to take an overseas trip every second year or perhaps you need to make a lump sum spend such as a caravan so you can travel around Australia? And top tip – is your car big enough to tow the caravan?! This is often overlooked and is an expense that needs to be included in your planning.
Healthcare needs are also an important consideration. Are you hoping to have enough money to pay for an at home carer if needed or would you like to put funds aside for an aged care facility?
How long your money will last in retirement is also hugely dependent on WHEN you want to retire. If you retire at 60 it is sensible to ensure your income is projected to last for 35 years. If you want to retire at 70 you will need significantly less in your retirement fund.
Your risk tolerance when it comes to investing will also affect any strategies we propose. Your answers will help determine your perspective on certain investments and your overall retirement strategy. That includes how much money you aim to put away and how soon you’ll want it available.
Do you want to leave a legacy?
Most people decide that they want to enjoy the fruits of their working years and opt to fund their retirement by spending pretty much all super and investments. They see the family home as their major contribution to their loved ones’ inheritance. If you can leave more than this be sure that your estate planning is robust to avoid unintended consequences such as tax and estate challenges. If leaving a more substantial legacy is important to you we can help you plan for it.
Everyone’s circumstances are different. We can tailor a strategy that will work for you so that you have peace of mind. The last thing you want to be worrying about in retirement is money.
Get in touch. We have an experienced team of financial planners on the Sunshine Coast including Gympie and Brisbane and Ipswich.
