Retiring as early as possible with the certainty of a comfortable financial future is a dream for most of us. Having an investment plan in place early is the key to achieving this goal, as CATHERINE ALLEN explains
If you have a young family, a mortgage, school fees to pay, a new car on the horizon, and everything else that makes life so interesting, thinking about retirement is possibly one of the last things on your mind.
But one of the reasons that so many of us work so hard now is so that we can enjoy a comfortable and happy retirement.
Putting some planning in place early on in your working life can go a long way to establishing the type of life you will enjoy when you retire.
The most basic question when thinking about retirement, and planning for it, is “how much will I need?”.
That really depends on your own personal circumstances and goals. There are a few factors to help you frame your thinking:
How long will you be retired for?
That starts with when you want to retire.
There’s no set age for retirement, but you can’t access your superannuation until after you reach what is termed your preservation age. For most people, that’s at 60 but can be earlier if you were born before 1964.
If you were born after 1956, the pension is available at 67.
Victorians enjoy one of the highest life expectancies in the world. On average, most of us will live past 80, so you should be planning to fund at least 25 years of retirement.
What sort of lifestyle do you want when you are retired?
The amount you will want saved will depend on if you are single or a couple and the type of lifestyle you want to lead. Looking at it in the broadest terms, an annual retirement income of $60,000 for couples and $45,000 for singles is the base that you should be aiming at for a comfortable retirement.
Not only are we living longer but we’re fitter and healthier in our later years. This means that we can consider a retirement that is full of activities and travel. If that’s what you have in mind, you may need to consider a bit more.
So, what do I do?
Once you have an annual target amount in mind, you need to start thinking about how you are going to build the asset base that will get you there.
That’s really about striking a balance between the needs of today, like paying down your mortgage, and your plans for retirement. Happily though, every asset you build can be converted into a retirement fund in the future.
The best way to deal with these varying investment priorities will differ for everyone. We recommend setting aside time to sit down with your financial adviser to work through it.
Having a plan in place will give you the peace-of-mind that always comes from having your finances under control. It also creates a positive focus and motivation in knowing that you are working towards the type of retirement that you want and deserve.
Make an appointment to chat with Catherine Allen about your retirement planning HERE.
Ryan Fennell, Shane West and Jarrod Owen of The Fennell West Unit Trust trading as Fennell West are Authorised Representative(s) of GWM Adviser Services Limited ABN 96 002 071 749, an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies. Licensee No. 230692. Any advice in this article is of a general nature only and has not been tailored to your personal circumstances. Before acting on this advice, you should consider whether it is appropriate having regards to your personal objectives, financial situation and needs.