What is it about Birthdays that makes us take stock? At a recent review meeting Brad told us that he had recently turned 60 and it had prompted him to think about retiring. The idea of not having to work anymore was suddenly very appealing, but he was concerned that he wasn’t going to have enough to fund a comfortable retirement.
Firstly, we got Brad to complete a budget. This helped us to identify surplus and build a strategy for optimising it. Given the low interest rate on his mortgage (1.99%) and the minimal balancing owing, this strategy involved redirecting the identified surplus and the additional repayments he was making on his loan towards his superannuation. In the current market environment this strategy would provide him with a higher rate of return on his super and substantially minimise his tax. Our projections showed that this would also reduce his tax liability by over $15,000 a year. Less money to the ATO and more money in your pocket for retirement is always a good thing.
The real value of professional advice in these circumstances is the financial modelling and projections we can do for clients. By taking two different scenarios – retiring in 12 months as opposed to waiting five years - and entering all the data, we were able to provide Brad with a clear picture of some retirement options.
As always the sooner you start focusing on your retirement nest egg the better, and many of our clients are curious about how much super they should have at their age. If your balance is not where it should be there are some simple things you can do to accelerate your savings including consolidating super from multiple funds, salary sacrificing or contributing part of future pay rises to super.
We always tell our clients that how long your money lasts in retirement also 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.
It is always rewarding to help clients like Brad achieve peace of mind. The planning process had shown him that he had choices. Instead of slogging away for another five years Brad is now free to spend more time ticking off his bucket list while he is still young.
If you are thinking about retiring but are unsure if you have enough money to do it get in touch. We can provide the clarity you need.
We have an experienced team of financial planners on the Sunshine Coast in Gympie, Brisbane and Ipswich.
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.
