How to avoid running out of money - Retirement planning strategies
Retirement has changed. We are not only living longer; we are also healthier and more active than ever before. This has all kinds of implications for our retirement and the amount of money we need to sustain our lifestyles. The statistics paint a concerning picture, with the average Australian set to outlive their money by 11 years!
So how do you make your retirement funding last the distance to ensure that you are not forced to live off the Age Pension or downsize the family home? By the way, the current Age Pension rate for a homeowning couple is less than $34,000 per annum!
The key is to plan ahead by:
Knowing your needs in retirement
Knowing where you stand financially and the goals you would like to achieve in your life will make planning for retirement much easier. We recommend that you start setting your retirement goals at least 10 years prior to your anticipated retirement date to ensure a higher probability of achieving your retirement goals.
Maximise your superannuation strategy
Excluding the family home, for most Australian’s their superannuation is their largest financial asset which will be used to provide retirement income. However, the average Australian most likely does not know the details or how much super they have. Ensure you know your super balance, how it is invested and talk to a Financial Planner about the various strategies that you can use to maximise your super before you retire.
Create surplus cashflow as soon as possible
Getting into a positive cashflow position as early as possible in life will help when building retirement planning strategies. We understand that families have significant costs including mortgage repayments or the cost of raising a family, especially in their 30’s and 40’s. If you can get into a position of having surplus cashflow by 50 then this can be used to create additional wealth that could result in the difference between a basic retirement and the one that you dream.
Seek Financial Advice
Retirement planning is easiest when you have a concrete figure to keep in mind to shape your idea of exactly what your retirement income will look like. This is where the expertise of a financial planner will work with you to discuss your retirement goals, determine whether you are on track to meet these goals and develop a strategic plan to help build sufficient financial assets so you can enjoy a stress free retirement.
For further reading on Retirement Planning, we recommend this related article: 'How much do I need to retire'?
WLM Financial offers a single-team approach to help you across your entire financial life: business and personal, accounting and financial planning. Find out more about our range of Financial Planning services or Accounting Services or book a meeting for a friendly follow up to discuss your financial needs.