Author: Janelle Kirk When we are kids, most of us get taught about the basics…
Preparing for retirement is all about identifying your priorities, so it’s important to know how to work towards a comfortable and enjoyable lifestyle.
Unfortunately, many Australians struggle to achieve their dream retirement due to misinformation, bad guidance, or even no guidance at all.
So many of us work tirelessly throughout our whole career only to end up with a far less-than-ideal retirement life. But all this can be avoided through smart planning and careful consideration of essential retirement funds.
What’s more important is the truth about retirement in Australia. There are so many myths out there that get in the way of people achieving their ideal retirement. Here, we tackle 3 of the most common myths we hear. We hope the truth sets you on a path to financial success.
Debunking Retirement Myths
Thanks to the internet, it’s easier for people to share different information. Anyone can figure out simple facts about certain products or look up the nearest service provider for home repairs. Unfortunately, this accessibility can also be a tool for misinformation.
This unfortunately results in false and unreliable information on the internet without a reliable source. This is why many people believe in false truths and pay for the price, literally in the case of their retirement.
As qualified, independent financial advisers in Newcastle, we want to share some truths about retiring that we know can help people reach their goals.
If you want to start your retirement plan right, ignore these three retirement myths:
- Retirement Will Cost You Less Money As You Get Older
Many people think their retirement lifestyle will be so much cheaper compared to their working years.
You will no longer have to pay for unnecessary trips to and from work, significantly reducing this and other related business expenses. You won’t have to pay off your mortgage or other loans, plus you may even downsize your house which will cost far less.
However, people in retirement age are actually likely to spend more as they get older.
One thing that many retirees forget to plan for is medical expenses. Unfortunately, as we age, we often run into health conditions and medical complications which can be extremely costly.
Medical care doesn’t always come cheap, especially for more complex illnesses. This is why it’s essential to expect medical costs for your future and to include them in your financial plan.
Additionally, retirement equals extra time on your hands which in turn typically means spending much more money on recreational/creative activities e.g. travel, lunches, hobbies.
So, while you may save money in some areas of life, you will spend far more in others.
- Your Retirement Fund Only Needs to Last Until You’re 85
While the average life expectancy in Australia is around 85, you shouldn’t just strictly budget for 20 years of retirement savings.
Some of my clients have been lucky enough to live to their late 90s but what’s even luckier is that they were financially prepared for this.
The last thing you want is to run out of money in retirement – especially as it is a time when you are meant to relax and enjoy life. Nobody deserves to stress about their money in retirement which is why you should always be optimistic and plan for a long, full, and happy life with finances to last the whole way.
- I Can Easily Access My Money in Retirement Whenever I Need
Many people think they will have easy access to cash once they decide to retire.
Some retirees use lifetime annuities to secure their income once they stop getting paid for salary. However, being locked into a fixed income stream won’t always grant access to funding unexpected expenditures.
If you want to ensure a more sustainable source of capital in the future, you may need to consider a flexible approach to your retirement income strategy or alternatively, a combination of fixed and flexible income streams.
Plan for Retirement the Right Way
Nothing is worse than making plans based on misinformation. If you are planning for retirement, you want to be armed with the right knowledge and expert guidance so you can enjoy the retirement lifestyle you deserve.
Consider seeking support from financing experts to point you in the right direction and the reliable truth you deserve.
Our professional team at Newcastle Financial Planning Group is well equipped to guide you on the different facets of your retirement plan.
With our financial advisers’ help, you’ll have access to all the options you need to build and secure your future. If you’re looking for quality retirement financial planning in Newcastle, book a complimentary meeting with us 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, Coastal Advice Port Macquarie and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.