Getting Ready to Retire
Some of us dream of an early retirement, while others are keen to keep going as long as possible.
According to the Australian Bureau of Statistics, close to 40 per cent of working Australians cannot pinpoint an age at which they would retire.
The 2013 "Retirement and Retirement Intentions" report found that of those who could indicate a retirement age, 49 per cent said they planned to retire between the ages of 65 and 69, while 25 per cent said between 60 and 64.
Whatever age you decide to call it quits from the workforce, one of the most important considerations is that you are financially ready. Being prepared and knowing how you will fund your later years should make the decision to retire easier.
You may want to seek financial advice to ensure you are making the best use of tax breaks and government concessions, but here's a starting point.
Calculate your monthly income
Use an online calculator to estimate how much monthly income you'll receive in retirement from savings/ superannuation/pension.
ASIC's MoneySmart calculator, for example, allows you to play around with different variables such as what income you're likely to have when you retire and how factors like investment options and retirement age affect your retirement income.
ASIC's MoneySmart Superannuation Calculator can help you calculate how much super you'll have when you retire and how the fees your super fund is charging will affect your final payout.
Work out what lifestyle you want
Cost out a decent retirement lifestyle, including expenses like car, clothes, health insurance, entertainment, hobbies and holidays. When your budget is complete, check that it matches your monthly income. If it doesn't, you'll need to find ways to save more, cut spending or boost your income in retirement.
Review your insurance
It's important to have adequate health insurance and other insurance coverage, including life and income protection leading up to retirement.
Read up on retirement investments
Find out as much as you can about investment options that can be used to deliver consistent retirement income.
It's a good idea to invest at least some of your money in assets that will grow over time like property. This will help ensure your capital growth will grow in value to keep pace with inflation and your income needs. Using equity and/or rental income from your property can serve as an excellent supplement to other savings strategies. As your mortgage adviser we would be happy to refer you to an appropriate specialist to answer your questions about life insurance.