I have just read my Super statement…
I am turning 65 in about 3 months’ time and I plan to retire the week after my birthday, but I have just received my super statement and I am not sure if I have enough money to last me. I have $175,000 in my accumulation account and I plan to take out enough for an overseas holiday next year and to buy a new car. I’m going to apply for the age pension and then I want to draw enough from my super account to give me the same kind of income I’ve been getting from work. I need the same income because I still owe some money on my home and my wife doesn’t work.
Does this scenario sound a bit far-fetched?
Do you think that everyone plans their retirement for years ahead? We find that some people do, but many don’t give that matter much thought until the time comes to quit their job. This conversation is one that happens with frightening frequency and it means that many people are unable to live the life that they have dreamed of in their later years.
What can I do now so that I am prepared for my retirement?
Like everything that we do, planning and preparation are key factors. Seeing a financial planner is a good starting place, as a planner will be able to advise you on the most appropriate path. Sooner is better, so that there is time to make changes that will make a difference well ahead of your planned retirement date. Setting proper goals and objectives is vital.
It is really never too early to take this step. For example small things put in place when you first begin to earn a salary will compound over time and place you in a much more substantial position than if you were to do nothing. A simple strategy such as saving a small amount from each and every pay will make a large difference to your retirement savings not only from what you have saved, but from the effect of compounding. It’s a good idea to increase your savings every time you get a pay increase.
Don’t rely on a credit card to fund your living expenses, unless you pay it off in full every month so that you don’t incur any interest charges. If you don’t have the cash available now, don’t buy it! Save a little each pay period so that you can afford to pay cash for it. You will have the added satisfaction of having earned something that you really wanted!
If you have a home loan, make sure you have your repayments scheduled at the most effective frequency – your adviser can assist with this. Pay a bit more than your required minimum payment, and don’t decrease the amount that you pay because your interest rate has dropped. They won’t always drop and it will be a real benefit to have made a big hole in your outstanding balance while rates are down.
Is it ever too late to seek financial advice?
No, not really, because there will always be advice that will benefit you. It may well be too late to realise some of your dreams and aspirations, but careful advice and planning can help you to make the best of what you have.
Are you interested in planning for your retirement? Are you ready to retire now? For your free initial consultation call our office today, toll free on 1800 679 000 for our Rockhampton office and 1800 804 431 for our Melbourne office. One of our friendly advisers would be delighted to speak with you and help you plan for your retirement.