Although retirement may seem far away, it tends to arrive far sooner than most people expect. Plan early for retirement to increase the likelihood of enjoying your desired lifestyle after you stop working. This ensures financial security and peace of mind for you and your loved ones as you get older. With this in mind, let’s look at retirement financial planning, including what you need to consider and how seeking financial advice will drastically improve your retirement strategy.
Financial planning for retirement can feel overwhelming, so the best approach is to divide your retirement strategy into steps. Let’s look at each stage of the retirement financial planning process.
The first step of retirement financial planning is determining when you want to retire. Naturally, this could change, but it’s important to have a general idea. The retirement age in Australia is typically 67. However, it can differ depending on various factors such as financial status, health condition, career decisions, and personal circumstances.
A retirement timeline also determines how much time you have to implement your financial plan. If you’re 30 and plan to retire at 65, for instance, you generally have more options and long term retirement planning. If you are 40 years old and plan to retire at 55, you may have limited time available. In this case, seeking financial advice can be helpful in order to develop a proactive investment plan.
Your retirement financial planning may be affected by when you can receive the Government Age Pension. If you were born after July 1, 1957, you can qualify at age 67.
Similarly, your retirement financial planning could be influenced by your qualifying age, i.e., when you’re eligible for the Government Age Pension (For people born after the 1st of July 1957 the eligibility age is 67)
Age Pension eligibility is also determined by:
Next, consider your retirement goals: your ideal lifestyle and plans for all that hard-earned extra time and freedom. For instance:
Generally, the simpler your retirement plans, the less income you’ll need. While more active and elaborate retirement plans will cost more.
Assessing your present financial situation will reveal whether you’re on track to meet your retirement goals. And, if not, how you can refine your retirement strategy. This includes:
The next step is calculating your retirement living costs. Your desired lifestyle will determine these, so it’s vital to consider your retirement goals beforehand. This could include:
Estimating your living costs allows you to evaluate your retirement income options and determine whether they’ll be sufficient or if you need to make adjustments in advance.
Generally, your retirement income will come from a combination of:
Here are a few ways to increase your savings and boost your available retirement income:
If you haven’t started investing for retirement, consult a financial adviser to find the best investments for your situation. A financial adviser can help you lower risk and improve performance by reviewing your assets and suggesting changes.
There are several reasons why it’s wise to seek retirement financial advice.
A financial planner can help you:
No matter your current financial situation, the skilled team of financial advisers at K Partners can help your plan for your perfect retirement.
Please note that all the while the information provided above is factual in nature, it’s also intended to apply generally, and to a broad audience. Subsequently, the information hasn’t taken your personal circumstances or goals into consideration.