Looking forward to retirement? Here are our Top 10 Tips to make sure you’re on track.
Tip 1: Take stock
How do you want to live in retirement? Do you want to have a modest lifestyle or one where you get to enjoy those things you worked so hard for such as travel or renovate your home? So how much will it cost? How much have you already saved? Do the figures meet your expectations? If not, what action do you need to take now?
Tip 2: Plan for the rest of your life
Most people are retired longer than they expect and with medical advancement this is likely to develop even further. Whilst your health and family longevity will influence your life span, if you’ve survived life’s early risks, such as accidents or illnesses, you could easily live into your nineties or older. Plan for the long term, and don’t forget that you may need extra assistance or care as you get older which can be very costly.
Tip 3: Review your investments
For your savings to last the rest of your life, you need to invest for the long term. And that means getting the investment mix right, with a balance of income and capital growth. Diversifying your investments across cash, fixed interest, shares and property will help reduce risk and achieve smoother, more consistent returns over time.
Tip 4: Stick to your plan
Investments can quickly change in value. While it can be tempting to sell everything when the market falls and put all your money in cash, that’s often the worst thing you can do. It’s important to remain focused on the long term as history has shown us the market will recover over the long-term.
Tip 5: Start Saving & Keep Saving
If you are already saving extra for your retirement, continue! If you are not putting extra away then it’s time to get started. The sooner you start saving the more time you will have to save for your eventual retirement goal. In Australia you can contribute to your super pre-tax meaning not only can you increase your end retirement savings but you may also be able to reduce your ongoing income tax during this time.
Tip 6: Get your affairs in order
Ensuring that your assets you have worked so hard to build up will be eventually passed on to your loved ones is a critical part of retirement planning and wealth transfer. A comprehensive estate plan allows you to transfer these assets to the right people at the right time. You should speak to your solicitor not only about drawing up a Will but also ensuring that you have the necessary Power of Attorney’s in place. Wealth protection is essential in maintaining and preserving your wealth for your family and future generations. And remember to review your estate plan at least every three years.
Tip 7: Stay fit and healthy
If you stay mentally and physically active, you’re more likely to enjoy a long and healthy life. Keep working part-time, take up a hobby, learn a new skill or volunteer in your community.
Tip 8: Retire Debt Free
Australian’s love to own property and mostly fund it through debt. In retirement the benefits of having investment debt cease once your income stops. As such it’s important to determine whether it’s worthwhile continuing to maintain and pay these interest repayments. The first priority should be to pay off the debt on your own home and retire debt free. Let’s face it money is better in your hands than the banks!
Tip 9: Think about the “what ifs”
The last thing you need in retirement is for your finances to be affected if something unexpected happens. Review your personal insurance needs to make sure you are fully protected. It’s just as important now than when you had kids and a family to look after. An unforeseen event could have a massive impact on your retirement plans so it pays to make sure you continue to protect yourself and your family. Don’t also forget health and travel insurance cover, especially if you plan to travel a lot.
Tip 10: Use an Expert
Making financial decisions can be complex, ever changing and difficult to understand. Seek professional advice from a financial adviser to ensure your plan is on the way to helping you achieve your retirement goals. They can also assist you in developing a plan to bridge the gap between where you are now and where you want to end up.
This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 (“Prime”). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information.
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