Planning for Retirement Australia: 5 Tips for a Successful Retirement

Do you want those final years or decades to be truly golden? Let’s face it, we all do! But to ensure our retirement in Australia is successful there’s plenty of pre-planning to be done.

If you’re yet to start preparing for this time in your life, our latest blog might shed some light on where to focus your energy.

Below, we share some practical tips to help plan for a more fulfilling retirement, or watch our short video here:

DISCLAIMER – The information provided in this blog is general and does not consider your individual financial needs or objectives. It does not constitute personal advice. We recommend seeking out professional and independent financial, legal and tax advice which has been designed for your individual situation before acting on any information contained below.

5 Tips for Planning a Successful Retirement

1. Plan your retirement lifestyle

One of the first questions to ask yourself is, what are you going to do to keep yourself occupied during retirement? And secondly, how is your lifestyle going to look?

Many of my clients want to travel, either overseas (when we can!) or domestically in a caravan. And while this is a fantastic goal to have, humans are not built for years or decades of travelling and leisure.

We suggest you also consider having at least three (3) activities or hobbies that you enjoy, to keep you both physically and mentally stimulated. 

2. Start building your wealth for retirement early

Most financial planners will tell you it’s never too early to begin preparations for retirement, and we agree.

Small amounts of salary sacrifice to superannuation through your thirties, forties and fifties will do significantly more than huge amounts of salary sacrifice for a few years in your sixties!

Not only is the compounding interest a massive boost, but also the length of time putting away small increments will add up and end up just being more than large increments over a few years.

3. Check your super regularly

When it comes to superannuation, there are two items to monitor frequently: Investment allocation and insurance premiums.

• Investment allocation: We recommend that you check that your funds are invested appropriately for you. Some super funds automatically put you into more defensive investment options as your get older. While the notion is that you may want to be less aggressive as you approach retirement, we believe some of these funds allocate money into far too defensive options far too young.
• Insurance premiums: You might have the same level of insurance that you had 10 years ago, but the premiums are considerably higher now and you may just not need that much cover, e.g. the mortgage might be paid off, the kids might be older.

4. Plan your retirement drawdown strategy

Everyone’s retirement lifestyle will look different so it’s important to plan your drawdown strategy so you can make the most of each stage.

A lot of people convert their super to a pension and draw the minimum and live on that. This amount increases as you get older. But that might not be the best way to do it because most people will be far more active in the early years of retirement and may want to spend more during those years and less later.

However, with that in mind, it’s also important to refrain from spending too much at the beginning of retirement, because if you don’t leave yourself enough money for the later years you could end up living just on the Age Pension, which isn’t a great lifestyle.

But depending on your situation, the Age Pension encourages you to spend more earlier on, as it can increase how much you get.

We go into more detail about this in the video above, so be sure to check it out!

5.  Invest appropriately after retirement – and allow for future inflation

We believe inflation and investing defensively (such as having a lot of your money as cash or term deposits) are huge risks to retirees. If you think about what things cost, bread, fuel et cetera, 20-30 years ago, well, what are they going to cost in 20-30 years from now?

So, if you’re investing too defensively and you’re not investing in enough growth assets, your money won’t keep up with inflation.  

Plus, you could find that inflation has devalued your retirement assets to a point where you’re not living a good lifestyle in those late years of retirement. (Don’t forget you could have 25-30 years of investing left after you retire!)

Are you Planning for Retirement in Australia?

Want to learn more about retirement planning? We list the 5 biggest mistakes we see in our blog here.

If you’re worried you won’t have enough money to have the retirement you want, we can offer advice that’s tailored to your goals and desired lifestyle.

Give us a ring today on 1300 200 012 or send us a message online here.

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