A comfortable retirement, free of money worries is a not an unreasonable goal. Everyone’s expectations of what this means will vary but with some good financial planning there’s no reason why you can’t make it happen.
The current ASFA Retirement Standard stipulates that to retire comfortably you will need $45,962 per year as a single person or $64,771 as a couple. This is a conservative estimate that accounts for one international flight every seven years and one domestic flight a year. If you have grander visions then you may want to increase your retirement nest egg. Many people wish to maintain the same standard of living. If this is the case, a handy rule of thumb is that you will need two-thirds (67%) of your pre-retirement income (if you own your own home). (1)
Setting yourself up for a comfortable retirement requires an honest look at what you want to be spending your money on once you stop working. Do you want to remain in your own home, or would you be content with downsizing to free up some extra cash? Do you want to travel and dine out regularly? What sort of aged care are you imagining, and have you made provisions for health costs? Another key consideration is when you would like to retire. If you retire early then you will need ensure you have enough money to last.
Preparing a budget for retirement is a good place to start. The sooner you start planning for your retirement the better. A financial planner can look at your unique circumstances and do some financial modelling and projections to ensure you are making the most of your money now and for the future.
Are you feeling ‘uncomfortable’ about your retirement?
Are you starting to get a nagging sense that you haven’t been proactive in your retirement planning? It is never too late to start creating a more comfortable retirement picture. There are things you can do including increasing your super contributions and curbing your lifestyle to free up more money for your investments. You could also consider a transition to retirement strategy.
It is important to remember that your retirement is not just about your super balance. If you have other assets outside of super it may be worth developing a strategy that will maximise your return on these so that they can also help fund your retirement. Seek advice from a financial planner about how to do this in the most tax effective manner.
Start now
Seize the day. Although it may feel overwhelming to begin with, our lived experience with clients shows that breaking your situation down and putting plans in place is incredibly empowering. Often our clients say that they feel their situation is complex. Our job is to simplify your retirement planning and to help you achieve your goals. Get in touch.
[1] https://moneysmart.gov.au/grow-your-super/how-much-super-you-need
General Advice Warning: The information provided in this article is general in nature and does not consider your particular investment objectives, financial situation, or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.
Dobbrick Financial Services (Gympie) Pty Ltd ABN 48 931 205 109 and Dobbrick Financial Services (Ipswich) ABN 86 100 184 521 & DFS Oakland ABN 64 340 527 395 and their advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
