The 7 step retirement plan

Research has found that approximately 47% of Australian couples and 78% of single Australians will be not be able to fund their retirement (source: “Retirement adequacy – a grim outlook for Australians” Towers Watson). In my recent blog, ” Gould Wins Gold “, one of the roles of a financial adviser was to keep on you on track to achieve your goals. As you get closer to retirement, another key role of a financial adviser is to help you plan for retirement.

Here are 7 steps for the retirement phase of your life to ensure you are well prepared and able to fund your retirement.

1. Prepare a personal transition plan.
You are about to enter a new phase in your life and transition from working full time to part time or retiring.  To help you prepare for this major change in your life, you should prepare a personal transition plan. A personal transition plan will help you work out what you want to do with your life when you are no longer working so that you can live a meaningful and enjoyable life.

2. Determine how much money you will need.
Once you have worked out what your new lifestyle will look like, you need to establish your financial goals. These financial goals may be different to the goals you established when your focus was on accumulating wealth. These goals will have different levels of priority – important when establishing the appropriate investment strategy for each of them.

3. Establish your retirement planning gap.
Your retirement planning gap will be measured by the cost of your retirement planning goals, your existing sources of funds and how much you will accumulate between now and when you retire. The cost of your retirement planning goals is going to be affected by your planning retirement date and your life expectancy. You will need to consider a range of probabilities for your life expectancy and plan accordingly.

4. Update your superannuation plan.
Superannuation remains the most tax effective way to fund your retirement. The opportunities to contribute to superannuation decrease as you get older and closer to the end of your working life. There are a range of strategies that can be used to maximise your superannuation savings.

5. Review your investment strategy.
As you are nearing retirement, you should take a more active and dynamic approach to managing your investments. A sequence of poor returns may have a big impact on how long your money will last in retirement and when you can retire. Your investment strategy will also need to be tailored to each of your retirement planning goals and their importance to you.

6. Debt review.
You may have non-deductible debt, and debt used to accumulate wealth. It may be an appropriate time to reduce your non deductible and deductible debt to reduce your risk and exposure to downturns in share and property markets.

7. Wealth protection plan.
Whilst your insurance premiums may be getting more expensive as you get older, it’s important to maintain or review your wealth protection plan. In other words, protecting your most important asset – your income earning ability. A key component of retirement planning is allowing yourself enough time to implement the above strategies. Considering all your options at least 10 years out from when you would like to retire is recommended.

If you would like to review or prepare a retirement plan to maximise the probability of you achieving your retirement goals, please contact me at Everblue on 0499976058.


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.


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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