What Do You Need to Think About Before Retiring?
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Retirement Planning

What Do You Need to Think About Before Retiring?

Author: Daniel Brown

Retiring early can seem like a far-away dream for many Australians. However, with early and careful preparation, I have witnessed this dream become a happy reality for many of my clients.

But one thing I have learned is that it takes time and investment to make it happen. It’s never too early to start planning for your retirement: the earlier you prepare, the more opportunities you will have in your golden years.

Preparing for Your Retirement

The average retirement age for Australians is around 65 years of age. But we want to help you be better than normal so you can retire when you want and how you want.

There are around 20 years of your retirement that you will need to plan for and fund. It’s also important to consider your lifestyle choices and the increasing cost of living, which will only better your retirement preparations.

In this article, we’ll share two key items you should prepare to do before dreaming about your retirement plus tips on how you can create the perfect retirement plan.

1. Determine How Much Money You Will Need

The Association of Superannuation Funds of Australia (ASFA) provides Australians with a general guide for future retirees as to their target goal for retirement funding. They have provided two benchmarks for people, depending on if you are in a couple as well as what lifestyle you would prefer.

As a guide, a single person would need around $28,000 dollars to live a modest retirement lifestyle. In contrast, a person who wants to live a bit more comfortably should expect to aim for $44,000 dollars per year. However, if you are a part of a couple, it is estimated that these values would change to be approximately $41,000 dollars and $62,000 dollars respectively.

You may be thinking these amounts don’t seem like much – especially for a modest retirement. So, what exactly does “modest retirement” mean?

This modest budget only really accounts for essentials like day-to-day living expenses and the occasional small holiday or social activity. On the other hand, a comfortable budget will allow you to enjoy your retirement more with enough money for things like upgrading your house or car, an overseas holiday, and other recreational activities you would like to do.

2. Consider When You Can Access Your Super

Australian retirees can access their super once they reach preservation age. This is an age anywhere between age 55 and 60, depending on your date of birth. However, if you are planning to retire early, it’s important to understand you may not be able to access your super balance yet. This may mean you need to plan for other income sources for your retirement.

Once you have access to your super account, you have two options to use it. First, you can leave your money in your super account as a nest egg to continue its investment earnings. Keep in mind that your earned assets will be taxed to a maximum of 15 percent.

Another way to handle your super post-retirement is to create an income stream by using your investment earnings as a regular income payment. This will still be subject to tax until you reach 60 and older at which point it usually becomes tax-free. You can also withdraw cash tax-free after meeting the full condition of release on an ad hoc basis.

These are two of the most important things you will need to consider as part of your retirement plan. While this can be a good starting guide to help you prepare, there is so much more that goes into an effective financial plan for your retirement.

While your retirement is a personal achievement, seeking professional help is always a welcome strategy to secure your future.

Making the right financial choices can bring you one step closer to reaching your retirement dreams.

Do you need Financial Planning Services in Port Macquarie?

If you need a reliable financial adviser in Port Macquarie, you’re in the right place.

Our team of financial experts can provide you with the best retirement plans to secure your comfortable future. Contact us 1300 143 510 and book a complimentary meeting with our financial advisers today!


DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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