Are you thinking about retirement?
It’s no secret that most of us are so overwhelmed by the topic, that we’d sooner mow the lawns of every local park, than give it a moment’s thought. But, it doesn’t matter if it’s one, two, or 30 years away, the time to start planning for it is now.
Funding your lifestyle through a long period without an income is integral to retirement planning. Here are few of the questions that often serve as roadblocks, and how you should go about them!
How long do I need to prepare for?
The average Australian male is expected to live to 81 and for female’s it’s 85. However, it is entirely possible that with a healthy lifestyle, you could live to 90 and beyond. We all know that our health is critically important, so understanding the relationship between how healthy we are, and what our life expectancy might be, directly ties into the equation of identifying how much Super you will need. So, if you’re a non-smoker who’s fond of kale smoothies and is regularly active, you’ll need to ensure that you account for a long future of R&R.
How much do I need?
Luxury for some, might be modest for others. A comfortable lifestyle for one couple might mean $60,000, whereas another couple might need $150,000+ in order to live, what for them, is classed as a ‘comfortable’ lifestyle. Start by breaking down your desired lifestyle, thinking about the cost of everything from food and groceries, to travel (you’ve got to have fun, after all!), to the activities that you choose to undertake daily, weekly and monthly. By understanding the cost of your desired lifestyle, it makes understanding how much Super you’ll actually require a whole lot easier!
What about my family?
How much support do you want to provide your wider family? Do you aspire to help them with the mortgage, or possibly treat the grandchildren to a cruise throughout the idyllic South Pacific? How about the types of activities you’d like to be able to support your family with? Once again, this directly impacts how much Super and savings you’ll be needing in the future.
Will I take claim the Age Pension?
If you’re considering supplementing your income with the basic Age Pension, it’s important to note what that means for you. It represents just over $20,000 for a single person, and $33,000 for a couple per Annum (which is just 27% of the average Australian’s income). It is important to keep in mind that your current investments, assets, and super balance may impact your Age Pension entitlement as well, so it is worth getting some advice on how this could impact you.
ClearWay Advice and Financial Management is a Corporate Authorised Representative Representative No.473095 of Keystone Partnership Pty Ltd ABN 22 169 650 720, Australian Financial Services License (AFSL) No.466137.