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Retirement Planning: Building wealth for retirement
Friday, 04 April 2025
It's never too early to start planning for retirement. By establishing a clear plan now, you can pave the way for the lifestyle you've always dreamed of.
The chance to retire early can be a game-changer. Love or loathe it, money gives you more freedom to do what you desire, especially in retirement. From travelling the globe to enjoying fine dining to living without the stress of financial burdens. Building a solid nest egg allows you to live the life you’ve always dreamed of.
But accumulating enough wealth to live comfortably in retirement isn’t something that just happens. To make this dream a reality, careful planning and smart financial decisions can set you on the path to a secure, fulfilling retirement that could come sooner than you think.
It’s a good idea to seek advice from a qualified financial advisor when planning for retirement. They offer personalised guidance to suit your specific needs and goals, helping you navigate investment choices, savings strategies and can address any worries you may have.
Creating your retirement plan
Think of your retirement plan as a roadmap through one of life’s most important transitions, helping you navigate the future with confidence. It should cover various aspects of your life, from when you want to retire to how you'll manage your finances and maintain your dream lifestyle.
Here’s five considerations for creating a retirement plan:
1. Plan for the rest of your life
One of the biggest misconceptions about money in retirement is that it's going to last. This is why you need a well-planned strategy to ensure you can keep enjoying your hard-earned cash for as long as you need to.
Start by asking yourself what you want your retirement to look like. It's a good idea to know your number. That’s the amount of money you'll need to live comfortably. Once you have that figure in mind, you can plan how to get there. And if you can't get there, you might work up a plan around that and alter your goals accordingly.
Knowing your financial and lifestyle goals is invaluable for creating a map that can guide you to achieve them. There are lots of little things you can do along the way. Like cutting back on things that aren't making you happy and concentrating on the things that do. Setting those goals and priorities is really important because, without them, you won't know where your money's at, making it much more difficult to save.
💡It’s a good idea to speak to a professional, such as a financial adviser. They can point you in the right direction and give you options about how to get the best return from your money.
2. Create a budget and a timeline
While some say money can’t buy happiness, it’s important to remember that a sturdy foundation in retirement can grant you the freedom to live your best life. Creating a budget should account for essential costs, daily living expenses, discretionary spending and unexpected emergencies.
The Australian Government’s Moneysmart website has many resources and tools to help you create a budget, understand superannuation and plan for retirement.
The Australian Government’s Retirement Planner can also help you work out your expected income when you retire. By reviewing your current income, age and desired retirement timing, this tool can help you work out what income you're likely to get from various sources when you retire. It also looks at how contributions, investment options, fees and retirement age affect your retirement income.
💡Remember, you don’t have to be a certain age to retire. Factors like your health, career opportunities, financial status and individual circumstances all come into play.
3. Supercharge your super
Superannuation is like a pot plant. If you metaphorically water it and look after it, it will flourish. But if you leave it in the dark without nourishment or attention, chances are it won't do as well. It's your money, so you must pay attention to your super investments.
When planning your financial future, look at all your assets and get a big picture of what you own. A large part of that is your super. People underestimate how valuable super can be. And don't always understand that it should be treated as an investment. But because your super account may have been set up decades ago, you might not think to reassess how it's invested and what the investment portfolio looks like now.
One of your priorities might be protecting your capital, so if the market drops, it won't be a problem for you. Look at how your super money is invested and try to protect as much of it as possible from potential market downturns.
4. Be tax effective
Let's face it. Tax can be taxing. But there are strategies you can use to help you be more tax effective. For example, you might not realise that superannuation is a tax-effective way of building wealth in retirement. Because you're taxed significantly lower inside of super than outside of it.
When you turn 60, there's another tax-free reason to celebrate. If you convert your super into a pension at the magic age of 60, you enter a zero tax environment. So the money you pull out of your pension is tax-free, as is any investment growth within it.
💡Just make sure you speak to your financial planner for specific advice first.
5. Tailor your plan to suit your lifestyle needs
There are many financial products on the market. Some might suit you, others might not. Some come with high risk and higher returns, while others take a more gentle approach.
Think about your personal goals for retirement, such as travel, hobbies, volunteer work or spending more time with family. Consider the things you've always wanted to do but haven't had time for, like travelling, pursuing your passions or starting a new hobby. Retirement is a chance to make your dreams come true, so think about what will make you happiest and start planning for it now.
With a big change like retirement on the horizon, it’s also important to foster good physical and emotional health. Staying fit and healthy means you’ll be able to do all the things you’ve dreamed of in your post-work life.
It’s also important to look after your emotional wellbeing by building supportive relationships and managing stress effectively, especially as you navigate lifestyle changes. Remember, there’s no time like the present to establish good habits for the future!
💡Speaking to a professional, who understands all the options, can help you tailor a plan to make your money work as hard for you as possible.
Plan today for your best tomorrow
Planning for retirement can help you handle your money better and adjust more easily as your life changes. Taking into account factors such as timing, lifestyle preferences, income, expenses and overall health and wellbeing can help you pave the way for a fulfilling and secure future.
⚠️Disclaimer: The information provided here is for general informational purposes only and should not be construed as financial advice. It’s important to consult with a qualified financial advisor or professional who can provide personalised guidance tailored to your specific financial situation and goals. Making financial decisions involves inherent risks, and individuals should conduct thorough research and consider their individual circumstances before making any decisions.
For more information about the lifestyle and support offered at our retirement villages, call our customer service team on 1800 550 550 or send us an email here.
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