Retirement financial advice: is this the year you retire?

Looking to retire next year? A comfortable retirement involves planning, seeking advice, and making wise financial decisions.

During the Christmas break and as the new year approaches, many individuals contemplate what the upcoming year holds for them. Those nearing retirement age often ponder whether this will be the year they finally retire.

Making a significant decision like this can be challenging, and it’s important to tread carefully. In this article, we revisit some of the previous guidance provided by Precision Wealth Management and explore key factors to remember before, during, and after retirement.

Retirement financial plan: recap

In a recent video, we discussed 5 tips to retire in 5 years. In that video, we examined:

Working out a budget:

Determining the retirement income needed to sustain your current lifestyle involves subtracting debt repayments from your expenses to arrive at an annual income target for retirement.

You should then multiply that income by 17 (to factor in inflation over a 30-year period) to estimate the assets required to generate that income each year for 30 years. This approach provides a rough estimate of the financial assets necessary for retirement.

Map out a rough plan:

Assess your retirement age (more on this below in planning for retirement: retirement age.)

Have a clear picture of your retirement lifestyle so you can calculate your likely expenses in retirement and see if your current asset position will provide you with that income. If it’s not, then changes need to be made.

Maximising pre-tax super contributions:

Maximise your pre-tax super contributions by using salary sacrifice or making tax-deductible super contributions.

Work out what you’re going to do to keep yourself fit and healthy:

After dedicating over four decades to our careers, we frequently overlook the challenge of filling 40 hours a week with our passions and pastimes once we retire.

Think about where you want to live in retirement:

Consider whether downsizing your home is appropriate. If you do downsize to a cheaper property, you will have more assets to last you throughout your retirement.

Planning for retirement: retirement age

Determining your retirement age is one of the most crucial decisions in your financial planning journey.

Pre 60:

If you’re planning on a very early retirement, think about how you are going to fund your retirement before you reach your preservation age and can access super. What non-superannuation assets do you have other than your home?

Between 60 and 67:

If you are planning on an early retirement, you need to be self-funded until you reach Age Pension age, which at the moment is 67.

Ask yourself: Do you have the funds to not only last you 7 years until receiving the Age Pension, but enough to live comfortably in retirement on the Age Pension too?

Over 67:

If you’re retiring at Age Pension age or after, consider how much superannuation you’ll need to top up your Age Pension entitlement to give you the lifestyle in retirement that you are after.

Retirement financial advice: is this the year you retire?

Preparing for retirement is a critical phase of life that requires careful planning and consideration. Seeking advice from financial experts can provide valuable insights into making wise decisions and ensuring a comfortable retirement.

By taking the time to plan and make informed financial choices, individuals can set themselves up for a secure and fulfilling future.

If retirement is on the horizon for you, it’s essential to seek expert financial advice from professionals who can help navigate the complexities of retirement planning.

Your future financial security and peace of mind are too important to leave to chance, so take the proactive step of contacting Precision Wealth Management today to ensure a smooth transition into retirement.

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.