6 minute read
5 key tips to plan for a secure retirement
Retirement is an exciting time of your life where you should be able to relax and take time to smell the roses. But you need to prepare and plan for your retirement if you want to live comfortably.
Your retirement is a stage of your life that you should be excited to reach and work towards over your lifetime.
Securing your retirement plan
In most cases, people work towards securing their retirement funding ahead of time, but many don’t think about what planning should accompany it. And do we start early enough?
Rosie Bouton is Principal Financial Planner and Aged Care Specialist at We Plan Financial where she helps seniors plan for retirement and beyond. She says that when it comes to retirement planning, it’s a case of ‘the earlier the better’.
According to Ms Bouton, people who have engaged a financial planner early into their retirement planning, are less panicked than those who only start to think about what they want and how they are going to fund this next stage of life when they approach the retirement age.
Positive impact
Any early planning you do can greatly benefit your retirement outcomes and have a positive impact on you down the track. consider their preferred lifestyle requirements for retirement, but also prepare for any increased care needs that may occur as they get older.
Her advice is that you should be realistic about when you are going to retire, consider future medical conditions you may develop or if you plan to work for longer to better boost your savings and superannuation.
Additionally, always keep your expectations in check. While there are dream ideals for how and when to retire, it doesn’t necessarily mean you will be in the position to reach that goal. It’s better to be realistic about your retirement outcomes.
Top five tips
1. Keep an eye on your super
While it sounds simple, Ms Bouton says that people need to know where their superannuation is held. A lot of people end up with multiple super funds across different super companies and are unaware of how and where they are invested.
In some instances, your super may be invested in a way that is not aligned with your preferences or appropriate risk profile. She recommends keeping an eye on your superannuation accounts and make sure your super fits your specific risk profile.
2. Protection
Insurance can be very important when it comes to large assets; you have insurance for your car or on your home.
However, according to Ms Bouton older people don’t protect the biggest asset they have, which is their ability to earn an income themselves. Once you lose the capacity or struggle to undertake your job, this can have a huge impact on your life and financial situation.
Ms Bouton recommends people have adequate insurance cover such as personal insurance, which could be life insurance, Total and Permanent Disability Insurance, Trauma Insurance or Income Protection Insurance to protect themselves as much as possible from different events that can occur that may impact on their ability to save for retirement.
3. Estate planning
Ms Bouton encourages all of her clients to have updated estate plans. It is important to ensure that your Will, Advance Care Directives or other important documents are as relevant as possible to your current beliefs and circumstances. Estate planning can only be put together if you have full capacity, and you can never know when you will lose the ability to make decisions for yourself. It is better to be prepared for any incidents by having up-to-date estate plans in place.
4. Track your budget
It may seem like a no-brainer for some, but there are people that don’t track their every-day spending as they should. Tracking your expenditure can be a vital part of meeting your retirement plan goals. If you don’t track your spending, you may not be able to appropriately understand why you aren’t hitting your super or saving targets, or aren’t growing your retirement nest egg. Watching where your funds are going day in, day out, can help you stick to a budget and achieve your financial retirement objectives.
5. Engage a financial planner
A financial planner can take a load of stress off when preparing for retirement and they can even implement appropriate strategies that fit your individual needs. For many, retiring can be scary, especially when there are unknowns you don’t understand. An aged care financial planner can have the skills to help you navigate the barriers you face and prepare you for future costs.
According to Ms Bouton, when asked, the number one priority of her clients is always living independently at home for as long as possible.
So if you want to meet this goal, you need to start thinking and talking about how you want to live when you retire, how you are going to fund this and plan for the possibility of requiring extra help or care around the home later on. Otherwise, you may be left without any choice and the decision is taken out of your hands.
Disclaimer: The information in this article is general in nature and does not constitute legal or financial advice. Readers should seek their own personal legal and financial advice from a suitably qualified practitioner.
Planning helps prepare for anything
Aged in their mid-fifties, Joe and Lucy were worried about their financial situation. With increasing debt levels due to credit card debt, they had very little in savings and were unsure how their superannuation worked. They had an overwhelming feeling they were not moving forward and a fear they would never be able to retire. Guided by their financial advisor, Joe and Lucy were able to identify clear goals and create workable strategies within realistic timeframes, whilst receiving ongoing education and support. Aged Care Financial Advisers (ACFA) assisted Joe and Lucy to consolidate their debt into the one loan, manage their budget and cashflow, boost their savings to provide them with some cash reserves and increase their superannuation investments using tax effective strategies and reviewing their underlying investments. The organisation also ensured they had adequate insurances in place so in the event of illness, injury or death their financial future would not be in jeopardy. Joe and Lucy would meet with their advisor twice a year to ensure they were on track with their plans. Their cash reserves and super grew in value while their debt decreased. As a result, they were able to reduce the level of their insurances and in turn provide them with improved cash flow. Sadly, nine years after meeting with ACFA, Joe passed away unexpectedly. Although Lucy was devastated, she and her family were reassured that financially she would be ok. Joe’s insurance allowed Lucy to pay off the mortgage. She had cash reserves, allowing her to take some time off work while she got accustomed to life without Joe. As Joe’s spouse, Lucy inherited his superannuation and this, along with her own superannuation, allowed her to still be financially secure in retirement. Financial planning is not just about money, it’s about peace of mind, confidence, a trusted relationship and financial certainty. Case study provided by Aged Care Financial Advisers
The information contained within this content has been provided as general information only and prepared without taking into account your financial position, objectives, and needs. You should consider its appropriateness and seek financial advice before making any financial decisions.
