About the only thing we universally agree upon that is exciting about aging, is the prospect of retiring. Who can’t wait to rock the high pants look, or in Newy’s case high pink pants. Finally, a chance to do everything (or nothing) with your days, read books, drink mojitos, go to the beach (This retirement plan sounds like an extended trip to Bali). While we often have a clear vision of the freedom we will feel once we are retired, we usually don’t have a clear vision of how we will attain the means necessary to reach this freedom. In fact, a recent ANZ Survey of Adult Financial Literacy in Australia found “approximately 37 percent of Australian adults had determined how much they needed to save for retirement”.
There are a lot of people working with no end goal when it comes to retirement when they could be working towards a comfortable and satisfying retirement that will afford them the luxury to do things they are passionate about.
According to the ASFA to achieve a comfortable retirement, “singles require $545,000 in superannuation and couples $640,000 by age 67”. This is in addition to owning your home and having great health. A comfortable retirement is subjective to each individual, some may want to drive a Porsche and travel to Europe every year, some may desire to buy a camper van and travel Australia. Whatever a comfortable retirement may mean to you, the principle is the same, you need to start planning and considering it now. With the average superannuation fund balance for people between the age of 55-64 being $249,183 for women and $354,564 for men, achieving a comfortable retirement where you can afford to do the things that you are passionate about but chose to put off during your working life is a scary prospect.
If we want to live well in retirement and be able to indulge the passions that make us happy, we must be prepared now to take the steps required to save the money we need to realise our dreams. If this doesn’t happen retirement could be another stressful part of aging, like getting grey hair or noticing you’re turning into your mother or father. This doesn’t mean you should focus on working now so you can live your life later. The good news is that with proper planning you can work towards retirement while still living your life. It’s all about being prepared!
So here are some tips on how to plan for your retirement:
Establishing retirement goals:
People rarely get what they want out of life without being able to determine what it is. Why else did you stay in those backpacking joints on your Euro Trip if it wasn’t too find yourself? So, figure out what you want and perhaps, more importantly, figure out how you will achieve this. What age do you want to be when you retire? Where do you want to travel to? What activities will occupy your day when you retire? How much money will you need to make this happen? Knowing that you want to retire one day is simply not enough. Develop a list of goals and a plan to reach these goals. Even better sit down with a professional and let them establish steps for reaching these goals. The Newman’s team can help you develop these goals and properly execute them.
Develop a strong investment plan:
Managing your retirement plan can be challenging even if you have financial knowledge. So, ask for advice and develop an investment strategy for developing a lucrative superannuation fund. Our team can explain investment strategies focusing on balancing risk and the associated returns you can expect from your investments.
Start saving as early as possible:
This is a conflicting concept for many as on one hand you should live your life now instead of worrying about the future. However, you can feasibly save without restricting yourself from experiencing life. Go out for a fancy meal with your old friend from out of town, buy that dress you really want, go on a family vacation, but also monitor your grocery expenditure, restrict your coffee intake, cut down how many times you go out for dinner each month. You can still have a good time while having saving on your mind, you just need to be smart about it. Saving as early as you can for your retirement will save you stress later in life and whilst spending lots of money on pointless items can sometimes be cathartic it’s ultimately a fruitless endeavour. The government recently delivered some rare, good news by making personal contributions paid into super by employees, tax deductible from 1 July 2017!1 Newman’s can show you the best ways to save for your retirement.
Realistically very few people will wake up on the day of their retirement with the exact amount they need to do all the things they want, so preparing yourself is essential. These tips are a great starting point, but you are much more likely to be successful with help from an experienced professional. If you want the best outcome for your future, make an appointment with Newmans as soon as possible to chat about what’s required.
We are passionate about helping our valued clients realise their wildest dreams and are pleased to offer a one hour free “discovery” appointment to start the ball rolling.
1. Subject to a maximum cap of $25,000 for all concessional contributions.