What will your retirement look like? Research states that to experience a long, enjoyable retirement, you need to:
- Keep yourself healthy: Essentially, that means having a healthy diet, minimising processed foods, maximising fruit and vegetables, and moving.
- Financially Secure: This means different things to different people. It depends on what you consider to be a comfortable retirement. Does a comfortable retirement mean extensive overseas travel, downsizing, spending more time with the grandchildren, or somewhere between? The Association of Superannuation Funds of Australia advise that for a comfortable retirement, you need an income of $71,723 per annum for a couple to live comfortably. This assumes that you own your own home and have no children living at home. My experience is that retirees in their 60s living in Sydney would require significantly more than $71,723 to experience a comfortable retirement. Our recent survey found that most pre–retirees aim for an income stream of between $80,000 and $100,000. Many of these pre-retirees are factoring in purchasing a new car within the next five years and some overseas travel. Remember that this figure excludes mortgage repayments and assumes no children live at home.
- Part-time work: For those pre-retirees who feel that they will not have enough money to live comfortably in retirement, they will need to reassess their planned standard of living or consider working in a casual or part-time capacity to supplement their income.
- Tax Planning: I see several pre-retirees who leave it too late to get their finances in order. For example, they have too many assets outside of superannuation and are paying tax on their earnings at marginal tax rates. The earnings on assets inside superannuation can be tax-free if you are retired and drawing an account-based pension.
- Government Benefits: From age 67 (or earlier if born before 1957), you may be eligible for government benefits such as;
- Age pension
- Pension concessions
- Health care benefits
- Tax offsets
- Establish a social network: This network may include socialising with people that you previously worked with, as they were a big part of your social life and family, including children and grandchildren, sporting clubs, social clubs, etc. Active people are happy people.
- Finally, plan: Plan your life; don’t let your life ebb along. As people age, they tend to regret what they didn’t do more than what they did.
Should you require further information in relation to your planning a comfortable retirement, please feel free to contact Peter Quinn by submitting an enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.
The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.