A Simple Checklist When Considering Retirement Planning

You’ve probably considered socialising with friends, taking leisurely outings, and treating yourself to the occasional trip when it comes to your retirement planning.

But, have you thought at all about the logistics and expenses beyond that? If not, you are not the only one.

Nearly half (46%) of working Australians don’t know how much money they’ll need to save for retirement, according to AMP’s 2022 Financial Wellness survey.¹

Perhaps this is the case because so few of us have established clear objectives. Only 24% of people have a financial goal; the remaining 76% have not yet written down their aspirations for their post-employment lives.²

Given all of this, it is not surprising that we are losing trust in our ability to retire. More than one in five (21%) Australians who are now working lack complete confidence in their ability to maintain the style of life they wish in retirement- this is a reduction of 4% since the last survey two years ago. Less than one in ten (9%) people are also highly confident, which is a 5% decline.³

So, if you’re considering starting your retirement plan early, here’s a helpful checklist with the key factors to consider.

Retirement Planning Checklist:

1. Consider What Age You Would like to Retire

In Australia, there is no prescribed retirement age. You can retire whenever you wish; however, some things might influence your decision, such as:

• Employment opportunities
• Financial situation
• The age you can access your super.
• Your (and your partner’s) individual preferences
• Your health
• Your ability to access the Age Pension

2. Consider the Contents of Your To-Do List

Consider your retirement interests as well as your larger and more immediate priorities. Think about items like:

• Your leisure and social activities
• Keeping fit and active
• A variety of retirement living options, including moving to a new city
• Assisting any children you may have

3. Consider How Much Money You Will Need

The Association of Superannuation Funds of Australia (ASFA) estimates that individuals and couples wanting to retire today at the age of 65 will need a yearly budget of around $48,266 or $68,014 to support a decent lifestyle.⁴

Singles and couples would need an annual budget of about $30,582 or $44,034, respectively, to live modestly, which is regarded as better than surviving only on an age pension.⁵

All of these ASFA estimates are evaluated in relation to the current maximum age pension rates set by the government and are based on the assumption that people are in generally good health and have home ownership – as of the September 2022 quarter.

4. Consider Where Your Money Will Come From

Your super fund is just one of many potential sources of income you may employ to support your lifestyle in retirement.

You can typically begin accessing your super after you retire and reach your preservation age, ranging from 55 to 60, depending on when you were born. Knowing your super balance is essential for retirement planning because it probably makes up a sizable portion of your overall retirement nest egg.⁶

There may be benefits to combining your super accounts if you have more than one, such as only having to pay one set of fees. Before you consolidate, make sure you’re on top of everything because some features, like insurance, can be lost in the process. It’s always wise to seek professional financial advice before making critical decisions such as this.

Retirement Planning with Newcastle Financial Planning Group

A retirement planning checklist can help you make smart decisions about when to retire, how much money you should save for retirement, and what kind of retirement plan will work best for you. By following this very same checklist, you can avoid some of the most common retirement planning mistakes and make sure you have the right tools and information to achieve your retirement goals.

If you are looking for professional guidance to help you with your financial planning for retirement in Newcastle, look no further than our expert team here at Newcastle Financial Planning Group. We offer a wide range of services, including retirement planning, superannuation, investing/wealth creation, life insurance, estate planning, and aged care advice that are sure to help you boost your financial resources. Call us or book online and let us help you establish a solid retirement plan early on.

 

REFERENCES:

• 1, 2 & 3: https://www.amp.com.au/insights-hub/retirement/preparing-for-retirement/retirement-planning-tips#:~:text=AMP%E2%80%99s%202022%20Financial%20Wellness%20report%20reveals%20that%20almost%20half%20(46%25)%20of%20working%20Australians%20don%E2%80%99t%20know%20how%20much%20they%20will%20need%20to%20have%20saved%20for%20retirement.
• 4 & 5: https://www.superannuation.asn.au/resources/retirement-standard
• 6: https://www.ato.gov.au/individuals/super/in-detail/withdrawing-and-using-your-super/withdrawing-your-super-and-paying-tax/?page=2