Planning for your retirement allows you to take control of your lifestyle changes. Early planning gives you the prescribed time to explore your options at your own pace, in order to make proper and informed future decisions.
Determine How Much You Will Need
Ask yourself what your desired lifestyle in retirement would look like and then work out how much you will need to make that happen. Also, consider how long you will need it for (depends on your retiring age), as well as an approximate cost on any future medical bills incurred.
According to the Association of Superannuation Funds of Australia (ASFA), a single retiree requires approximately $24,506 per year to live a moderate lifestyle or $444,011 per year to live a comfortable lifestyle. To live moderately, a couple will require $35,189 per week or $60,457 per year to live a comfortable lifestyle (as at September quarter 2017).*
Work Out How Much Income You Are Likely To Have at Retirement
It’s cardinal to determine whether you will have an adequate retirement income to support your desired lifestyle. ASIC’s Money Smart Retirement calculator can help you do that based on your current income and various other factors. Go to https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/retirement-planner and understand what your situation will likely be. If you know/realise that you will need/require more assets than what you are forecasted, there are various/multiple ways to boost your income before retirement, including after-tax contributions, salary sacrifice, and using the downsize strategy.
Get Financial Advice
Seeking financial advice is highly advised when planning for your retirement. Our financial planners can provide proper advice on how to minimise tax on your superannuation, choosing the right pension, making smart investment choices, minimising tax on your super and maximising your eligibility for Centrelink benefits. They can also provide assistance in creating a plan to achieve your desired income, as well as answer any questions on the transition to retirement.
Remember, the sooner you start planning for your retirement, the more prepared you’ll be to achieve your vision for the future!
*Figures current as at March 2017.