Planning for retirement can be daunting, but it is an essential part of securing your financial future. Whether you’re just starting your career or are nearing retirement age, there are several steps you can take to ensure that you’re prepared for the next phase of your life.
Step 1: Think about your retirement goals and objectives
To effectively plan for retirement, it’s important to envision the type of lifestyle you want to lead during your golden years. This involves considering factors like your preferred location, desired activities, and healthcare needs. By taking the time to reflect on your retirement goals, you can create a roadmap for achieving them.
Step 2: Work Out Your Finances
One of the crucial steps to retiring is to work out your finances. This involves assessing your current financial situation, including your income, expenses, assets, and debts, and projecting your future retirement income and expenses.
A general rule of thumb is to ensure that you have between two-thirds and 80% of your pre-retirement income. According to The Association of Superannuation Funds of Australia (ASFA), single retirees typically require an annual income of at least $29,139 to support a modest lifestyle, while couples need at least $41,929 a year to live on. If you’re expecting to have a broader range of leisure activities in your retirement, you’ll need an estimated $45,962 if you’re single, or $64,771 for couples.
It’s important to have a clear understanding of your retirement income sources and how they will provide for your financial needs in retirement. Consider factors like savings, superannuation and the pension as well as whether or not you will have any income sources that could help to support you even after you retire. This could be passive income that you get from investments, assets or from working with a financial adviser to create a retirement savings plan.
Once you have a good grasp of your financial situation, you can create a budget and savings plan that will enable you to achieve your retirement goals. Seeking the guidance of a financial advisor or retirement planner can also be helpful in developing a comprehensive retirement plan that takes into account all of your financial needs and goals.
Step 3: Create a budget
Creating a budget is an important part of retirement planning. One way to start is by keeping track and understanding your expenses, including your fixed expenses such as housing, transportation and any healthcare bills. Having a good health insurance plan early on will also help you to cover any unexpected medical bills that may come up. It’s important to note that while you get to decide your retirement age, your preservation age (when you can access your super) and your pension age (when you’re eligible for pension) is determined by the government. So if you’re planning to retire before then, you’ll need to budget with those in mind.
Step 4: Consider your housing options
Living in a large family home can incur more maintenance costs (as well as cleaning costs) that might make it unnecessary if you’re living or alone or it’s just you and your partner. Many retirees choose to downsize as it saves them money as well as reduces the amount of cleaning and physical maintenance needed.
Some retirees prefer to live in a retirement village like St Ives, where you’ll have access to amenities like gyms, restaurants and clubhouses to enjoy at every village.
Step 5: Be open to change
Retirement planning is an ongoing process as situations change. Be ready and open to adjust your plans accordingly.
Your retirement years are the perfect time to try new things and do the things you’ve always wanted to do, so make the most of them by planning for a fun and fulfilling retirement!
If you’re interested to find out more about what it’s like to live in a retirement village, enquire today to get in touch with our staff.