Planning for the Perfect Retirement For many people, retirement is the final goal in a long career. It's also a major financial and lifestyle decision, which means that planning, is paramount. After retirement, your finances will look considerably different than they do now. Careful planning now can have big benefits down the road — it ensures that you're financially secure and ready to have fun after you stop working. At Sydney Financial Planners, we can help you develop a roadmap to a relaxed, comfortable retirement.
As you start to look toward this exciting period in your life, it's helpful to imagine what you want out of retirement. This is different for everyone; you might want to travel the world or spend more time with family and friends. Retirement opens up a world of possibilities. Some common options are: Travel: Cruise around the world, take luxury vacations, or explore your own backyard. Give back: Do good in the world by volunteering for charity organizations at home or abroad.
Discover new skills: Take cooking classes, discover how to edit your own documentary, or learn a new language. Hobbies: Use your newfound free time to go all in on favorite hobbies such as interior design, gardening, golf, or art. Work: Start another professional chapter with an exciting new job in a similar field or a completely new subject area. How much money is necessary for retirement? This is the big question in retirement planning — how much money do you need to live the lifestyle you envision? A number of factors go into this sum, including location and travel plans. As a baseline, most people in Australia need a minimum of $27,913 per year to live a simple lifestyle. If you're part of a couple, this number increases to $40,194. Keep in mind that these amounts allow for a very modest retirement. You'll have enough for basic needs, but there won't be much left over for vacations, repairs, or entertainment. Add in healthcare costs, and you'll need to pay strict attention to expenditures and budgets.
If you prefer a more relaxed lifestyle, it's a good idea to increase your expected annual expenses to $44,183 for one person and $62,435 for two. With this amount of money in the budget, you can buy high-
quality insurance, indulge in shopping trips, and take holidays in Australia and abroad. It also ensures that you can pay for car upkeep and new technology without much stress. The higher your retirement income, the more flexible you’re spending. When you start planning for retirement, it's helpful to establish an expected budget. List out all of your anticipated income and nonnegotiable expenses. This exercise gives you an idea of your base expenses. Of course, the perfect retirement is more than just getting by; ideally, you'll have enough savings to allow for entertainment, travel, and other treats. Don't forget about leisure expenses such as restaurant meals, new mobile phones, wardrobe upgrades, and highquality vehicles. If you have a partner, make sure to go through this process together — that way, you can adjust the budget to accommodate both partners' dreams. Are you struggling to imagine what your expenses will be decades down the road? Our handy Budget Planner can help. At a minimum, our financial experts suggest that you separate costs into three groups: required annual or quarterly expenses, required monthly expenses, and optional monthly expenses. Saving for Retirement Creating a budget for your dream retirement is the first part of the planning process. When you know how much money you'll need, it's time to make a financial plan to get there. To start, consider the sources of income you anticipate in retirement. Some common options are: - Dividends and interest from investments - Income from post-retirement employment - Government entitlements
- Personal savings - Payouts from a superannuation account - Inherited funds or properties When you add up all of these categories, compare them to your retirement costs. Are your expenses greater than your expected income? Don't panic; now is the time to make changes to improve your lifestyle down the road. Some options include adjusting your current lifestyle, seeking out higher-paying work, or exploring other options that can increase your income. You might also consider a more diverse investing strategy. Feeling overwhelmed? A professional financial adviser can assess your situation and make recommendations to help you achieve the perfect retirement.
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