How to prepare your retirement investment plan

How to prepare your retirement investment plan

When you transition to retirement, suddenly you become more aware of advertising by industry and retail superannuation funds proclaiming they achieve the best rate of return for the lowest cost. You may also hear from your friends about how they have set up a self-managed superannuation fund, based on a recommendation from their accountant to save fees and invest in so-called “blue chip” shares.

It easy to fall into the trap that choosing either of these options is all that is required to achieve your retirement planning goals and objectives. Retail, industry and self-managed superannuation funds are financial products that can be used to implement your retirement planning strategies. However, to achieve your retirement goals, you need a retirement investment plan.

The objective of a retirement investment plan is to create a long-term return on investments you require in order to achieve your life goals, whilst making sure that investment risk, taxation, and investment fees are all minimised, reviewed and monitored on a regular basis.

In my experience having a retirement investment plan is much more important than deciding which superannuation fund to use.

7 Step Retirement Investment Plan

We believe every person CAN have a long, happy and financially secure retirement by preparing a retirement investment plan in accordance with the following 7 steps:

1. Retirement Vision -what is the money for?

The first and most important step in preparing your retirement investment plan is developing your vision of retirement. Despite the importance of this step, it is often overlooked. If this first step is not completed correctly, the motivation for staying the course to achieve your financial goals is often lost.

For example, your vision of retirement may involve travel or relocating to a different location. If you have clear goals that you wish to plan for, you will have a much greater incentive to implement the retirement strategies required to achieve them.

Your life goals may be financial or non-financial and often there is also a financial element to your non-financial goals.  For example, you may need a lump sum to relocate and then retirement income for a later phase of retirement.

retirement vision

2. Financial Goals – how much money do you need?

A retirement calculator can show you how much money you need to achieve your retirement life goals.

Once you have established your retirement income and lump sum goals, each of them should be assigned an order of priority, based on your needs and what is most important to you.

3. Risk Assessment – what rate of return do you need to take to achieve your financial goals?

A risk assessment involves aligning investment risk with your personal risk tolerance to arrive at a rate of return you need, to achieve your financial goals. At times the investment risk required may be higher than your personal risk tolerance and trade-offs may be required for your financial goals.

It may be appropriate to have different levels of investment risk for different financial goals based on their level of importance, tax issues and investment time frame. Where you are able to meet your financial goals with your given level of personal risk tolerance is generally better than going outside of your personal risk comfort zone.

Often retirees are taking on much more risk than is necessary for them to achieve their financial goals.

4. Ownership – who or what entity is going to own the investment?

Deciding where to own the investment will depend on your personal tax structures, tax legislation, asset protection issues and your estate plan. We usually use a superannuation structure to accumulate wealth for retirement planning. We also review your accounting structures and adjust where necessary retirement planning strategies for alignment with your accounting, taxation and asset protection advice already provided.

5. Asset Allocation – how much should you invest in each asset class?

Your asset allocation represents how much you invest in each asset class to provide you with the minimum rate of return you require for your investment goals. Your rate of return is influenced by how much you pay for each investment. The asset allocation process enables you to buy quality assets at reasonable prices and allows you to take advantage of opportunities when they are available.

6. Diversification – what asset should you invest in within each asset class?

Investments within each asset class are diversified, so that your overall investment risk is reduced. Investment costs and tax efficiency are also taken into consideration when choosing the investments that make up your investment plan. Frequently we see very little diversification within asset classes creating unnecessary risks.

7. Review – how and when should you review your investment plan?

Once you have developed your investment plan, all aspects require regular review. Your life goals will change, as you transition to retirement and through the different retirement phases. The investment risk will change, due to a range of circumstances and therefore your investment plan needs to be reviewed to manage your risk, or to take advantage of opportunities.


If you follow the above steps to prepare your retirement investment plan you will have a framework that is flexible, dynamic and one that is designed to ensure you achieve your life goals with as little risk as possible.

As part of 7 step retirement planning process, we develop a retirement investment plan specifically for your situation, goals, objectives and circumstances. We review it regularly with you and adjust to minimise your risks and to take advantage of opportunities when they become available. By having a retirement investment plan, you will be avoid being influenced by the news of the day and advertising and focus on making sure your next 50 is your best 50!

Retirement Investment Plan

If you would like to find out more about how we prepare a retirement investment plan, click on the link below or contact us.

If you would like us to review our retirement investment plan, please contact us.

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.

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