When can I retire, and can I afford it?

Retirement… the longest holiday you will ever take, or something to fear?

To ensure a comfortable living standard in retirement, you will need to calculate how much you’ll need to retire and then plan how to get there, sounds easy?

There is allot of confusion surrounding when you can retire and access your super savings, versus when you may qualify and access any Centrelink age pension benefits.

When you can retire depends not just on when you want to leave the workforce but when you can afford to, the earlier you start planning for retirement, the better equipped you will be financially and emotionally.

Centrelink age pension qualifying age, for all those retiring after 1st July 2023 is now age 67.[1]

You can access your super savings, once retired after the age of 60.[2]

The average life expectancy factors for 67-year-old women in Australian is 87.73 years, and for an Australian man 85.24 years.[3]

But you could live to be 100, so you may need to prepare for beyond the average.

Theoretically, an Australian woman who retires at 67 and lives until the average age of 88 will need her retirement savings, investments, and superannuation to fund her living expenses for over 20 years.

Feeling confident about your retirement planning is key, you need to decide when it will start and how much money you will need to support your expenses, this will allow you to calculate the resources required, and put a plan in place to fund it.  Contact us to find out how much you will need.

Determining your retirement income needs

Start with taking the time to detail all expenses, it’s most important that you take the time to detail every single expense item, if you want to continue living a similar quality lifestyle once retired it is crucial that you itemise all current expenses accurately. You will also be able to deduct expenses that, hopefully, will not be there in retirement (mortgages, loans, expenses related to children) it is best to plan to be debt free once retired, or you may need more income to cover loans.  We have a comprehensive digital budget tool to assist you, contact us to access a copy.

Thinking about those retirement goals (like a holiday)

Retirement years are typically split into three main stages – the active years, the sedentary years, and the frail years.

Apart from covering ongoing household and personal expenses, there maybe additional lump sum requirements that you also need to plan for, holidays, updating larger expense items as time passes.

While most will hope and or plan to spend more in the active years, it’s important to ensure you also plan on having adequate funds set aside for the frail years. These are the later years of retirement where health and functional capacity may begin to decline, and additional care and support may be required.

Downsizing on your own terms

Whilst taking care of a large garden and maintenance on your property may not be an issue during the active years, as we start to age our ability to maintain larger homes becomes more difficult. Downsizing and moving provides us with the ability to make these independent choices whilst we are still relatively healthy and active, and with the security of knowing that when one person dies, then the other will be very comfortable, safe and be able to manage on their own. Read the complete downsizing on your own terms blog here.

Understanding how Age Pension contributes to your income in retirement

The Age Pension is the primary pillar of retirement income for many retirees.  Some will be eligible from age 67, some may not be eligible until further down the track when their asset base reduces, but it’s important to clarify your position regular to ensure you do not miss out on any benefits. Many people don’t feel they are eligible, until a professional adviser points out that they can access other benefits. Our government is quite generous, and one would need to have quite high assets not to qualify for any benefits. A trusted professional adviser can illustrate any benefits that apply and include them into your retirement plans.

Meet with a trusted Retirement specialist

One sure way to improve your financial position is to meet with an Adviser who specializes in retirement advice, they are on aware of all available strategies that can improve your retirement position, they will keep you on track and manage your plans effectively to ensure you take full advantage of legislative changes.

Having a financial plan in place provides many benefits, financially and emotionally, it reduces your risk, as you will have a much greater likelihood of achieving your financial goals, than by going it alone without a plan.

You will have peace of mind knowing that you’re on track to achieve your financial and retirement gaols and not having to worry about if you’ll have enough money.

You also won’t need to guess, or take high, unnecessary, or uneducated risks on investments because you’ll have a plan in place that you are confident with.

You’ll also benefit by working Christine Swanson as her recommendations will be specifically addressing your goals and you’ll have the peace of mind you need to feel confident about your financial future. Start making smarter financial decisions now!

Christine Swanson is qualified professional adviser so you can ensure all your decisions are well-informed and that your personal needs and goals are considered.

[1] servicesaustralia.gov.au
[2] ato.gov.au/Individuals/Super/Withdrawing-and-using-your-super
[3] aga.gov.au/publications/life-tables

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