We've listed some of the many financial topics that are worth considering and looking into further before you retire.
How much money will you need?
This depends on a range of factors such as age, savings, assets, health and the type of lifestyle that you plan to live. It’s commonly quoted that $1 million is needed for an individual to retire. For some, this would prove to be more than enough, while not enough for others.
When thinking about your annual budget during retirement, it’s also commonly quoted that two-thirds of your pre-retirement income is required to maintain your current lifestyle in retirement. This also depends on your pre-retirement income level.
Set a budget
Budgets are important at any life stage, and especially during significant live events, such as retirement. Your budget might need regular tweaks early on, as it’s difficult to predict the potential effects of more free time and less disposable income.
The number of Australians entering retirement with debt has steadily increased over the years. Whether it’s a home loan or ‘lifestyle debt’, it may not be possible to eliminate your debt, so it may be important to think about how to manage debt during retirement.
There is a lot to consider to ensure your loved ones and assets are adequately protected. It’s recommended to review your estate plan every five years, so retirement could be the time to review yours if you already have one.
Understand government entitlements
Whether it’s the age pension, rent assistance or the Hearing Services Program, there are various payments and services for older Australians to consider before and during retirement. With legislative changes every so often, it’s vital to be aware of your eligibility. Department of Human Services is a great starting point.
Accessing your super
You may receive super benefits as an income stream or lump sum during retirement. You may also receive a payment from your employer as an early retirement scheme. Legislative changes to super are also examples of where financial advice can help, such as the ‘carry forward rules’ that the Australian Government introduced in 2019, for the $25,000 concessional superannuation contribution that includes employer Superannuation Guarantee (SG) where you can contribute $125,000, averaged over a five-year period, provided your super balance is under $500,000.
If you are experiencing hardship due to COVID-19, click here for information on the COVID-19 early release of superannuation.
Our Senior Financial Planners provide expert retirement planning advice. Call 1300 654 193 to get started today.