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How much does one need to retire? It’s a great question but the answer is so different for everyone as it’s a highly personal thing, and very dependant on one’s spending expenses and lifestyle habits.

Where one couple finds $50,000 per annum enough another couple may need $100,000! Both are vastly different because everyone’s needs and lifestyle choices are different.

But what should be the same for most people, is a mindset of making a difference now and thinking about ‘How do I prepare for my retirement now?’ What do we need to be aware of, and what are the things we can do now to ensure we have enough sitting in the ‘nest egg’?

Tips on Retiring Comfortably, whatever ‘comfortable’ means to you.

1. What’s your current situation now?

Take the time to sit down with your partner and jot down the basics of your personal and financial situation. Things like:

• How old are you now?
• How much do you earn?
• How much is sitting in your super?
• What are your major liabilities?
• What is your mortgage?
• How many dependents do you have?
• What is your household cost of living?

And at the end of the day, it would be good to know what your net worth is. If we know what your net worth is, then this is a great starting point to begin the retirement planning journey.

Calculator: Net Worth Calculator by MoneySmart.gov.au

Check out the Net Worth Calculator to get a better understanding of your financial position. You may be pleasantly surprised or disturbed. If you’re feeling a bit queasy you can always ask for help, and talking to a financial planner may settle your nerves, and they could help to set out an easy retirement roadmap for you to follow.

2. What does retirement look like for you?

Now, spend some time thinking about your retirement wishes and goals. Things like:

• When would you like to retire?
• Would you like to retire completely or do some part-time work?
• What are all the things you would like to do when you retire (holidays, renovations, support children and so on)?
• Would you be mortgage free?
• What would your cost of living be minus the major liabilities like debt and raising children costs?
• Would you downsize? Move overseas?

These are all the questions a financial planner would ask you, so it’s good to be prepared to be able to clearly articulate your goals and aspirations.

Calculator: Retirement Planner Calculator by MoneySmart.gov.au

You may want to use the Retirement Planner calculator to understand the different retirement options based on your personal and financial situation. This exercise may reveal gaps that require attention now or that, your situation is looking good.

In any case, if you need help with retirement strategies talking to a financial planner is a good move as they can anchor on the strategies that are relevant for you…

3. Closing the retirement gap

No matter what your ideal retirement lifestyle may be, it’s time to plan for it now and to plan for the long term. Our age expectancies are getting higher as medical science and technology improves. This means having enough savings built up to last through the retirement years and beyond. Again, ask yourself, what are the things you can do now that’ll make a difference to your retirement plans. Things like:

• Are you making the most of super?
• Can you save more into super?
• How can you repay your mortgage faster?
• Do you have an investment plan outside of super?
• Can you cut down on expenses?
• Will you receive any inheritances?
• What do you do with your tax returns?

Some of these questions can be challenging on your own to answer especially when it comes to your super. There are many rules to be aware of such as how much you can top up your super before you have to pay extra tax and age restrictions on when you can top up extra amounts and so on. This is why seeking advice from a planner can be very helpful.

A planner can recommend making investments outside of super as well as inside super and at the same time put into place debt management strategies designed to help reduce your debts like your mortgage.

A strategic retirement plan looks at all available strategies that build wealth and reduce debt at the same time. It is also tailored to suit you, your situation and your retirement goals.

Summary

It’s never too early to start thinking about your retirement plans even if you’re in your 30s. It’s best to be prepared and to use the time you have to make the most of your wealth building capabilities and debt reduction efforts so your net worth has the opportunity to grow and compound to a sufficient ‘nest egg’ that can support your retirement lifestyle.

Start the thinking process and work with a professional to get a plan set up and put it into action now for a ‘comfortable’ lifestyle later.
The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.