You may be about to retire or have just retired and whilst you cherish the moment, you suddenly feel anxious about receiving your last pay-cheque and about your ability to earn an income in the future.
The question pre-retirees often ask is ‘how much do I need for retirement‘?
In my opinion, the question pre-retirees should be asking is ‘how much income do I need to for each of the different phases of my retirement‘?
“Understanding your retirement income needs is fundamental to having a happy, health and purposeful retirement”.
At Longwave Wealth we believe you need to understand your retirement income requirements for each of the different phases of retirement for the following reasons:
We assist you to understand what items are more important than others, enabling you to choose different ways to fund each phase. This process helps you to allay your fears about having enough money and allows you to adjust to what you are able to fund.
Rather than having one amount that you need for retirement, you will be able to establish different retirement goals for each phase and allocate the risk you are prepared to take for each different retirement phase. This will assist you in reviewing your progress and make adjustments to the funding required where necessary.
The process of identifying the separate retirement income required for each phase will help you avoid making rash investments. You will have a better understanding of the return required for each retirement income goal and framework to help you manage retirement risks, such as sequencing and longevity risks.
You will have a framework upon which to make decisions about what you will do with the money you have and communicate your intentions to whoever is impacted by your retirement plan
Plan for the unexpected
Your retirement planning process will assist in identifying what could happen and how much income is required to meet this retirement goal for the expected and the unexpected!
Breaking down your retirement income needs to different categories and levels of importance, will help you to focus on the present and enjoy each phase of retirement- rather than solely on return on investment. Not knowing how much retirement income you require, can lead to unnecessary frugality.
To achieve each retirement income goal, you will be able to see if you or your partner need to phase into retirement or consider working longer or pursuing different employment opportunities.
When you are in the transition to retirement phase, consider the different phases of your retirement and ask yourself how much income you need for each phase. This will provide you with a basis to then calculate how much you need for retirement and how you will fund each retirement phase.
In our 7 step retirement planning process we help you to define each retirement phase and then calculate how much income you will need. This process provides our clients with peace of mind that they are financially secure and allows them to make sure their second 50 is a time where they thrive and not just survive in retirement.
Have you planned your retirement income requirements?
General Advice Warning: Any advice on this site is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making any decisions.