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Figuring out Your Retirement Plan

Retiring from the paid workforce is one of the most important life changes most of us ever make. So why aren’t more Australians better prepared?

Here are some issues to think about and steps you can take to become truly retirement ready, so you can enjoy the lifestyle you’ve been looking forward to.

Retirement is a time of huge change — emotional, psychological and financial. On the one hand, it’s a well-deserved opportunity to sit back and enjoy the rewards of your many years of hard work, but unless you’re prepared, it can also create enormous stress and uncertainty.

Research from Investment Trends shows that despite investor confidence improving on the back of strong performance from the ASX, 91% of Australians over age 40 had concerns in relation to their retirement.1

The survey found the top concerns had shifted from having enough for essentials to having enough for extras (47%), inflation (43%) and outliving retirement savings (41%). Alarmingly, only 22% of Australians over 40 expect to be able to live comfortably in retirement.

Even with the recent market improvements, concerns like these aren’t surprising. After all, for many of us retirement means a sudden transition from income rich and time poor, to time rich and income poor. It’s a change with both positives and negatives, but it takes careful planning to make it work.

What’s more surprising is that many people don’t have a clearly defined plan. The same research found that 60% reported that despite their concerns, they don’t have a formal retirement plan in place.

So it seems that many of us have some urgent planning to do. The first step is think about your ideal retirement lifestyle. Where will you live? How will you use all of that new free time? Which assets or investments will you keep for yourself or your children, and which do you plan to sell to top up your super savings? Most importantly, how much income will you need to make it all happen?

Remember that with a longer time in retirement, most of us are likely to pass through several retirement phases with different income needs. Today’s new retirees are generally fit, active and adventurous, looking to travel the world and throw themselves into activities from golf to surfing, sailing. As a result, some find that they need at least as much income in retirement as they did when they were working.

Later, as the years go by, we tend to become a little more sedentary. Then we start to face increased medical expenses as we work to stay fit and healthy for longer.

Then there are all of those large capital costs to take into account — like a new car every five or 10 years, or house repairs and renovations. Together, it may add up to more than you think.

For more retirement information, please contact us! We are happy to help.





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