Finally, it’s time to pull up stumps. You have worked hard and feel its time you spent more time doing things you enjoy rather than working. Retiring is a major life moment and it’s important that you have the right plans in place to make the most of this milestone. We have prepared a checklist of things to think about if you are retiring this year.
1. Consider your exit date
Your exit from work date can have an impact on your tax so good planning is important. If you are thinking about retiring 30 June, it can often be more tax effective to delay it until 1 July, so the leave and entitlements aren’t added on the year’s income.
2. Review your investments
As you age your risk profile tends to change in terms of investing. Some retirees prefer a conservative approach and others may decide to be more aggressive. This stage of life can certainly be a good juncture to re-imagine risk. Your approach also depends on how much superannuation you have and how much money you want to have to live on in retirement. You will need to consider all your investments including property and shares and the income you get from these, as well as additional income you may be receiving from the Government. It can be complex which makes it worthwhile having a professional to help with your strategy.
3. Do you have enough to retire on?
‘How much money do I need to retire? ‘ is one of the most common questions our clients ask. The best thing about seeking financial advice about your retirement is that a planner can do the projections for you. We will look at your situation and calculate how much you will have to live on based on your unique investments and other income sources. Knowing where you are at provides great clarity and peace of mind that it is the right time to retire.
4. Do you have a budget?
Once you know how much money you have you can prepare a budget. If you are wondering how long your money will last in retirement it is about how you spend it. Retirement typically has different phases with changing financial priorities. In the early stages these may include ticking off bucket list items such as travel but as you age you will most likely have expenses such as medical and aged care to consider. We have prepared this handy budget tool to calculate where you allocate your funds.
5. Are you ready to retire?
Whilst we all dream of not having to work so hard retirement is a major life change. Your day-to-day routine will change significantly when you are no longer working. The people you connect with and how you spend your time will be vastly different. If you have plenty of hobbies you will probably be fine but if you are unsure as to how your new lifestyle is going to look it may be worth considering a transition to retirement. This will give you some time to adjust to not working so hard and the space to explore life outside full-time work.
The most important thing about retirement is having a plan for your future. This will give you peace of mind so that you can sit back and enjoy this special time of life. Please get in touch. We can help you make it happen.
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.
