Your retirement years should have you cruising in the Caribbean, exploring the world, and enjoying what life has to offer—all without the need to rush to get to your 11 am appointment or make ends meet. You deserve to enjoy your retirement years, which is why you need to plan for it well. Unfortunately, less than half of Australians over the age of 40 are prepared for retirement.
As dreary as that may sound, it’s not too late to get yourself financially stable to retire on time. All it takes is a little planning and preparation, as well as some help from a local financial consultant near you.
To help you out, here are some tips for planning your retirement thoroughly:
1. Decide When You Want to Retire
Retirement is personal, which means that you don’t have to follow the trend of when other people retire. You have to decide the best time for you to retire, as this decision largely affects your own life.
It will be helpful if you can write it down to help you sort out your thoughts clearly. You need to sort out your goals and set a clear timeline on when to achieve each of them. Be as specific as possible for even better results.
2. Determine the Amount of Money You Need
According to the Association of Superannuation Funds of Australia (ASFA), a comfortable income for a couple in retirement is around $62,000 a year. On the other hand, a livable income for an individual is about $44,000 per year. However, this is only a guide—the specifics of how much you need depends on the lifestyle that you live.
When it comes to determining the amount of money that you need, you need to have a set budget in mind. Set a realistic budget by looking at the money you spent in the past year. When you have this figured out, consider how you can cut down on costs and invest your savings.
3. Find Ways to Increase Your Savings
There is a gap between the amount of money you will have by the time you retire and the amount of money you think you’ll need. It is beneficial to identify this gap as early as possible because it will help you make more informed choices to help you deal with any issues later on. When doing so, include all the assets that will be available to you when you retire—this gives you a decent idea of the liquidity you may have by then.
4. Understand How Your Superannuation Works
It is important that you know how and when you can draw down on your super. This will usually be based on several factors, such as your age, work situation, and the type of benefits in the superannuation fund.
In most cases, you can access your super when you reach your preservation age, which depends on your date of birth (see here for preservation age). If you were born before July 1, 1960 and are retired, for instance, you can access your funds at age 55, which is considered your preservation age. At this point, you have to be working less than ten hours per week. You can also access your fund when you reach the preservation age and choose to start your transition to retirement income stream while you’re still working. If you choose to work until or beyond the age of 65, though, you’ll be able to access it even if you haven’t retired yet!
5. Know Your Eligibility for Government Entitlements
Retirement in Australia sets you up for eligibility for certain government payments, such as age pension, Carer’s Allowance, and Disability Support Pension. Check your eligibility for any of these because they will help boost your retirement income.
6. Work on Your Debts
When planning your retirement, it’s essential to retire debt-free. As early as now, you need to start working out your debts by paying them on time as much as possible. You might also want to consider if you can benefit from rolling them into one.
Aside from that, consider if you can make extra repayments and shop around for lenders with lower interest rates with no annual fee. This way, you can ease into retirement without worrying about having to pay-up on debt!
Enjoy Your Retirement
A lot of us dream about the day we can finally stop work and do all the things that we want. That is why the sooner you start planning for your retirement, the better your chances of making the most out of those years. By working on your retirement plan early, you can assure the quality of life you’ll be having when you’re relaxing into retirement.
Are you looking for money advice in Australia to help you with retirement planning? Here at Jubilee Financial, we will help you be in the best position to retire through Superannuation and other tax-effective measures. Contact us today to learn more about our services!