13 September 2015

Getting Retirement Ready

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Retirement is something we all look forward to, however, the planning can seem overwhelming especially when it comes to your finances.

With many Australian’s living longer, that generally means that retirements are getting longer too. With more years to enjoy your retirement, you will need to ensure your money lasts as long as you do.

What can you do to get yourself retirement ready:-

  • Define Your Retirement – you probably have some idea of how you would like to spend your retirement. Focus on your goals and experiences for now. Don’t focus on  budget right now. Try to be as specific as you can be, for example, most of us want to travel. Instead of travel, list the trips you want to take, the countries that you want to visit. Limit your list to your top give goals. Consider keeping a journal
  • Take Stock of Your Assets – start preparing a list of what you have from how much you have in the bank, your superannuation and or retirement account. What about those non-traditional assets that may help to fund your retirement? You may have antiques, paintings or restored cars. Just list them.
  • Evaluate Your Health – to get the most out of life and retirement – you want to be as healthy as possible. Schedule your checkups including your annual physical. With each of your health professionals, make a plan to improve and/or maintain your health. This includes eating healthy, exercising and getting enough sleep. Commit to staying mentally alert by reading and maintaining contact with family and friends.
  • Continue to Network – you should build and maintain your network even in retirement. Use appropriate networking opportunities to showcase your skills and talents. You may have a hobby or passion that can turn into a part-time or casual opportunity. The more socially active you are – the more opportunities you will likely to create.
  • Decide How Much You Want (or Need) to Work – you should consider you could turn that passion or hobby into casual or part-time work. As you consider your retirement goals, take into account whether you want to or have to work (even in a part-time capacity)
  • Create a Retirement Budget – it is important to start planning by tracking your income and expenses for a couple of months. This will give you an idea of how much money you will need in retirement to support your lifestyle. You will also need to a financial checkup of your investments. If you are carrying debt, ensure that your budget includes the appropriate repayments.
  • Find Ways to Cut Expenses – be better prepared by saving more. Find new ways to cut your expenses. Start by listing your bills and see where you can save. It may mean eating out once a week instead of three or even cutting back to one movie night a month. These small things can bring your closer to your retirement goals. Consider growing your own vegetables if you fancy yourself a bit of a green thumb.
  • Don’t Ignore Debt – don’t ignore your debt as a way to save more. Cutting debt now will mean loss stress and worry when you retire. Pay off your smallest debts first, regardless of interest rate. This gives you a sense of accomplishment and will motivate you to tackle the bigger debts.
  • Prepare for the Unexpected – sometimes things happen. Prepare for the unexpected now and you won’t get out. Take the time to consider how you would pay for an unexpected expense such as a house repair or something more serious such as illness. You should discuss these issues with your family and those closest to you. How much would it cost to make repairs and what would happen if there was an illness in the family. Make sure you have your bases covered.
  • Get Protection – ensure that your insurances are current and up-to-date. Ensure that you have all the right home, car, building, health and life insurances. If your insurance coverage in inadequate, now is the time to increase it. Put money aside now. Preparing now means you won’t pay later.
  • Give your super a boost – if you are earning a relatively substantial pay, it may be possible to give your nest egg a boost. Speak to your employer about salary sacrificing, or contributing to super from your pre-tax income. This means less take home pay now, however it adds to your super and is also tax effective. If you are on a lower income you may be eligible for a government co-contribution.
  • Transition to retirement strategies – if you are aged 55 or over, there are a number of transition to retirement (TTR) strategies that allow you to access some of your super while you are still working. This can open up a range of possibilities to boost your income, your lifestyle and even your super before you retire.

Retirement can be something that you are looking forward to, however, managing your finances can be hard work.

Talk to Verante today about getting retirement ready.

The author is an employee of Verante Financial Planning in Castle Hill, Corporate Authorised Representative of Magnitude Group Limited, Licence No 221557, Magnitude Group Limited ABN 54 086 266 202.

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