Funding early retirement can be a challenge
Funding early retirement is an important consideration for those choosing to opt out of the workforce before the traditional retirement age. The traditionally accepted age for retirement is 65. Whilst there is often discussion that this age should be extended because of extended life expectancy over the past century: nevertheless it is still the case that large numbers of people find themselves ‘retired’ well before that age.
If you – or your partner/ spouse – are ever confronted with that situation, the level of financial independence available to sustain you through your period of life expectancy will be a critical consideration.
Whilst most of us, particularly those who have entered the workforce during the past twenty to thirty years, are relying on superannuation accumulation to fund retirement lifestyles, there are statutory restraints to consider. The operation of the Superannuation Industry Supervision (SIS) legislation precludes access to superannuation monies prior to retirement unless a specified ‘condition of release’ has been met. These so-called conditions of release, include age, health and financial hardship considerations.
What can be done to ensure that funding is do-able?
We see two answers to this question regularly put into effect, usually in concert with each other:
- ensure adequate personal risk (life insurance) protection is in place; and
- accumulate assets that can be liquidated at the relevant time to provide the required financial independence.
Your access to both of these wealth management strategies is available by contacting your advisor at our office: in the meantime articles on our website Library page relevant to these areas include the following –
- Life Insurance (posted 14 August 2012);
- Does your Super look so super with insurance? (posted 11 July 2012);
- Self-funding Early Retirement (posted 10 February 2010); and
- Slow but sure wealth accumulation..(posted 25 October 2012).
Continuum Financial Planners Pty Ltd engages with clients to listen to what their anxieties are about future financial independence, to ensure they understand the financial resources available to work with – and to develop solutions in your best interest to overcome the obstacles as fully as possible, to the goals being achieved. To review your situation, please call us (07-3421 3456) or fill out our website Contact Us form and we’ll be in touch promptly.
(First published in September 2013, this article has occasionally been updated/ refreshed since, most recently in December 2020.)
