Our retirement planning strategies are unique and are designed to suit your situation and needs.
Leaving full-time employment is a great opportunity to enter a new and very rewarding life stage. It is a time to take stock of your current situation, clarify goals, identify opportunities and tailor your financial situation to support these. Creating a plan for your transition into retirement is about strategically investing your accumulated savings and superannuation to replace your wage with regular income throughout retirement.
A few things to consider regarding retirement:
A key piece of information in your retirement plan is an estimate on your expected remaining years of life. Whilst most people find this unpleasant or uncomfortable to think about, planning in this way means that you can live your life to the fullest by decreasing your ‘longevity risk’ (the risk of outliving your retirement savings). This estimate provides a ballpark figure regarding the number of years your alternative income must be capable of supporting your lifestyle. This will inform the amount you need to retire and give you an idea of a suitable time to enter retirement.
In Australia there is no fixed retirement age, however you can currently access superannuation benefits tax-free from age 60. Retirement age, ideally, is chosen by you according to your ability to financially support yourself and is dependent on the costs associated with your desired lifestyle after stopping work.
Your planned expenses after retirement will depend on your intentions, goals and lifestyle choices. It is common for people to plan for a larger post-retirement income initially, when they may pursue travel or hobby related activities which were not possible when working full-time. As people who have retired continue to age, their expenses may vary in line with their changing lifestyle. It is helpful to plan for your desired retirement to ensure you have adequate funds.
There are always uncertainties that even the best plans can’t predict. Thus, it is recommended to maintain flexibility in your retirement investments and account for unforeseen expenses which are likely to occur. Insurance can also be an effective solution to catering to these events. A prolific observation in the medical field is that average health costs increase steeply with age. Other events which may increase your required income during retirement include changes to tax laws, market crises or unexpected life events. By allocating funds in case of these events, you are even closer to securing your financial security in retirement.
The single most effective tool to ensuring a comfortable retirement is planning. By being aware, you can be prepared. PAC Financial can assist you in creating a retirement plan by maximising opportunity and entitlements. Every cent counts in retirement so give us a call today to discuss your options.