We’re retiring for longer, wanting a more stimulating post-work lifestyle and finding smart ways to maximise our retirement finances.
For many, retirement is no longer about living simply off the age pension – or purely about slowing down, enjoying a few hobbies and spending time with the grandkids. More people are wanting a fuller retirement lifestyle with greater options and financial flexibility.
With Australians’ life expectancies now higher than ever, many are needing to plan for 20-plus or even 30-plus years of retirement. According to Australian Bureau of Statistics’ population projections, a couple aged 65 today has a 50%
chance of one of them living past the age of 90.
The vital ingredient to having certainty, confidence and satisfaction in retirement is good planning – and, while getting ready financially is a big part of this, it’s about more than money.
Many people are not only kept busy with work responsibilities but it’s the social network and sense of achievement and identity that comes from work that’s so significant, so when they retire they feel lost or unsatisfied.
People need to consider their emotional, mental, social and physical retirement plans and ways they can keep learning and creating. Think in advance about what you want to do in retirement and who you want to be.
Once you’ve considered the retirement lifestyle you want, you’ll then need to think about what sort of income you’d need to sustain this.
According to research released in May 2012 by Westpac and the Association of Superannuation Funds of Australia (ASFA), a home-owner retiree couple looking to achieve a ‘comfortable’ retirement – including a broad range of
recreation activities and ability to afford private health insurance, good clothes and an occasional international holiday – needs to spend $ 55,080 a year. Those seeking a more modest lifestyle – better than the age pension but still only able to afford fairly basic activities – need to spend $ 31,643 a year.
People’s financial requirements will vary greatly depending on their personal circumstances and expectations, so a good place to start is to work out a rough yearly budget.
Then consider what investment amounts you may need and your sources of income to achieve this budget. These might include superannuation, other savings and investments, perhaps part-time work, and the age pension.
Even if people can only get a small entitlement to the age pension, this may still provide other significant benefits such as concessions on healthcare, rates, telephone and transport.
How you arrange your assets and income can make a big difference to how much you might be entitled to in age pension so seeking assistance from a financial adviser can really pay off.
A good financial adviser can also help you make the most of your finances by bringing a solid understanding of the complex rules around Centrelink, superannuation, tax and investments.
For example, rolling super into an income stream can offer valuable benefits such as favourable Centrelink income test treatment and no tax on investment earnings.
It’s important to put in place a plan to try and ensure your money lasts at least as long as you do. There are a variety of strategies and products available, including some that offer a guaranteed income amount.
Once people have retired, it shouldn’t be just a matter of hoping for the best. Regular reviews with their financial adviser can give people confidence that their plans are on track and provide opportunities to revise arrangements if
It’s never too late to make the most of your retirement.
Contact a Financial Adviser today to discuss your retirement goals and start living retirement rather than dreading it. Contact us today.
Article Source: RI Advice