When should you start planning your retirement?
Are you fantasising about living a life of luxury when you retire?
Whether you’re in the prime of your working life and have a long way to go or retirement is a part of your 10-year plan, planning should start well before your last day on the job.
20s to 30s
There is a school of thought which suggests purchasing a home is one of the smartest strategies to set you up for future retirement.
If you’re renting and wondering whether you should try to achieve the Australian dream, seek the advice of a financial planner for advice suited to your individual circumstance.
No matter if you’re renting or owning, the best thing that everyone can do for their future selves is evaluating different super accounts and find one that is low cost, with the right asset allocations.
While more than half of Australians live day-to-day without much notice of their super account balance, it pays to do your research on superannuation. In fact, by consolidating your super accounts and switching to one with low fees and a higher return, over your working life you could be adding thousands to your savings account to access in your twilight years.
Superannuation isn’t an investment, but a trust that holds your investments in certain assets. Which assets are up to you – and that’s why it’s advised to seek expert help when choosing the right super for your needs. You should also discuss with your financial planner how voluntary repayments in addition to your employer’s contribution can boost your retirement savings.
Starting early is the key to a comfortable retirement. It’s best to start planning your retirement in your 20s or 30s, as this allows you to take advantage of the power of compound growth in your savings and investments. However, it’s never too late to start planning for your retirement and make changes to your savings goals and retirement plan based on your changing needs and circumstances.
40s to 50s
Now is the time to be proactive and transform your vision into a reality.
Set a goal for the exact age that you want to retire and consider what steps you can do now that will set you up for your future success and make your dream retirement plan possible.
Ideally, you should have your home loan paid off when you start to plan your retirement. So, if you still have an amount owing on your asset, your primary focus should be making extra fortnightly repayments to pay down your principal. Do some research on how you can use your income more wisely to pay off your debt sooner and engage a financial planner for their expertise – your efforts could save you years and thousands of dollars in interest off the life of your loan.
While you’re in planning mode, consider whether you should be making personal deductions from your income towards your future savings or even using the advantage of salary sacrificing to build your nest egg. If you decide to salary sacrifice into super you will need to ask your employer to redirect a portion of your pre-tax pay to your super fund.
Retirement advice from retirees
Retirement planning can be intimidating – the reality is it’s likely you’ve never spent a long period of your life without bringing in some form of income and you may not know how much you’ll need to put away to live comfortably.
Retirees in Australia often offer the following advice for successful retirement planning:
- Start Early: Early planning and saving for retirement can maximise your time for savings growth.
- Consistent Contributions: Regular contributions to your superannuation or other savings vehicles help to establish a strong retirement foundation.
- Evaluate Spending: Assessing and adjusting spending habits can lead to increased savings for retirement.
- Diversify Investments: Diversifying investments across different asset classes such as shares, property, and bonds helps reduce investment risk.
- Seek Professional Advice: Consult with a licensed financial planner for comprehensive retirement planning assistance.
- Stay Informed: Stay knowledgeable about government policy and regulation changes that may affect your retirement savings and benefits.
- Plan for the Unexpected: Having a contingency plan for unexpected events such as illness or job loss can bring peace of mind to your retirement planning.
Retirees also suggest a balanced retirement lifestyle, including physical activity, social connections, and personal interests.
What are the benefits of working with a financial advisor for retirement
Financial advisors that specialise in retirement offers several benefits, including:
- Customised Retirement Plan: A financial advisor can create a tailored retirement plan that suits your financial situation, objectives, and risk tolerance.
- Investment Planning: A financial advisor can develop a diversified investment strategy that takes into account your risk tolerance, investment goals, and time horizon.
- Tax Optimisation: A financial advisor can recommend tax-efficient investment strategies to reduce your tax liability and maximize your retirement savings.
- Estate Planning: A financial advisor can assist with planning for the distribution of your assets after your passing, including will preparation and trust establishment.
- Retirement Income Planning: A financial advisor can help determine the best sources of retirement income, such as pensions, and investments.
- Regular Assessment: A financial advisor can help with regular reviews and adjustments to your retirement plan to ensure it stays on track.
- Professional Expertise: Financial advisors possess specialised knowledge and experience in retirement planning, reducing the likelihood of common mistakes and promoting informed decision-making.
Retaining the services of a retirement financial advisor can bring peace of mind and increase the chances of reaching retirement goals.
Inovayt retirement experts
The experts at Inovayt Wealth have helped a number of people to prepare and plan for retirement and manage and grow their superannuation with specialised strategies. Discuss your long-term plans with our friendly team by booking a free meeting today with a Financial Advisor to ensure that you can achieve a smooth retirement.