Disclosure Statement: Durand Financial Services Pty Ltd and its advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. General Advice Warning: The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances.
Money and Life
(Financial Planning Association of Australia)
If you’ve got retirement in your sights this year, we’ve got the ultimate checklist to help you retire in style. Discover how to prepare for this exciting new chapter in your life, safe in the knowledge that your finances will be taking care of you.
1. Explore your goals and make plans
Enjoying retirement to the full isn’t just a matter of money. It’s just as important to have a good long think about what you’d like to be doing when you’re no longer going to work. Will you want to travel or spend time with family or keeping fit? And when you’re faced with the idea of stopping work completely, you may want to continue working part-time or volunteer. A gradual transition to retirement can be a good way to manage your income needs too.
2. Work on your budget
When you do stop earning a salary your nest egg is going to have to last you for the rest of your life. So you’ll need to think carefully about what you have to draw on – assets, savings, investments and government benefits – and what you’ll be spending money on, including day-to-day expenses and household bills, your rent or mortgage and insurance as well as funding other retirement plans like trips overseas.
3. Reduce your debts
Interest on your mortgage, loans and credit card balances is a cost you’d rather not be paying once you’re relying on retirement savings for your income. If you have the funds to do so, it may make sense to settle as many of your debts as possible before you start planning and budgeting for retirement.
4. Budget for big ticket items
Don’t forget to include the cost of replacing your car, appliances or making major repairs to your home in your budget. The things you own and rely on will be ageing along with you and planning for these big bills will stop them having an impact on your day-to-day cash flow.
5. Check your eligibility for government benefits and super
Government benefits like the age pension and seniors card can make a significant difference to your income and budget but are you entitled? Depending on your circumstances, the process for being assessed and applying for these benefits can be complex so it’s a good idea to investigate this before you actually retire. There are also rules around accessing your super savings, including how old you need to be. Make sure you’re not counting on income from super if you’re still too young to draw on it.
6. Find out about tax
There are tax benefits and concessions available to retirees receiving income from their super, but these depend a lot on how you invest your money. And government policies and legislation around super investments and income and how they are taxed has changed a lot recently. So when it comes to choosing tax-effective investments that offer opportunities to earn a stable income, professional advice from a financial planner can help you make the right decisions.
7. Make a retirement income timeline
Working with a planner can also help with managing your cash flow during retirement. If you’re drawing income from a number of different “pots” – like super, any savings or investments you may have outside of super or the age pension – you’ll probably find it helpful to forecast how much you’re going to need from each one over time. If you’re planning to downsize to release equity from your home for example, an income timeline can influence when you decide to sell.
8. Take care of family matters
Is providing for your children likely to be a priority for you – either before or after your death? If you’re planning to transfer some of your wealth to family through a will, make sure this is accounted for in your retirement budget and financial plan. And if you’re expecting to help your children with financial and lifestyle goals in the near future – such as buying a house or getting married – bear in mind your own financial wellbeing and security before making the commitment. You may also want to consider making arrangements for one or more family members to act as your power of attorney in case you lose capacity for making financial decisions.
9. Find the right financial planner for you
A financial planner can help you get the right approach to managing your money for a secure and stable income that’s going to last throughout your retirement. For example, they can offer valuable advice on whether clearing debts is going to stop you from having a savings and investment balance that can deliver enough income to meet your needs. They can also help you draw up a realistic budget that takes into account all your retirement goals, including transferring wealth to your children if that’s important to you.
Your planner is likely to provide you with guidance and advice throughout your retirement years. So it’s important to find a planner you feel comfortable with and who has the expertise and understanding of your unique needs that can deliver the best advice and results.
10. Plan to be in the best of health
All the money in the world won’t help you enjoy retirement if you’re not in good health. Whether it’s including a gym membership, a new bike, home gym or stand-up paddle board in your budget, having a way to keep fit will go a long way towards maintaining your health and mobility as you age. And don’t forget to review your health insurance, both before you retire and as you age, to make sure you can continue to meet the cost of managing your health.
Want to find out how advice from a CERTIFIED FINANCIAL PLANNER®professional can help you get ready for retirement this year? Read our financial planner’s guide to preparing for retirement.