Why ‘Planning Your Retirement’?

Retirement is a very personal phase of your life: planning your retirement means that you need to be involved – and that your personal circumstances need to be taken into account in the process. The sooner the planning is done, the easier will be the process – and more certain the progress – towards that well-earned day.

You are going to retire – right? So, best start planning your retirement now.

You would like to be (financially) ready to retire at the time that suits you – right? Regardless of how much money you will need to retire with a lifestyle of your choosing, the sooner you start accumulating for that event, the less you will need to worry about as you get closer to the big day.

 The question we most frequently hear when clients raise this matter with us is: How much will I need invested to be able to retire and live comfortably?

planning your retirementWhilst the answers to the above questions will be different in each person’s case, the key considerations will include:

  • how long do you have until you would like to retire? – affects the investment timeframe available to you
  • how old will you be then? – determines the extent to which you will be to draw on superannuation (if at all)
  • where do you want to live in retirement? – this decision (and the remainder of this set of questions) helps determine how much you will need to retire at the proposed date: for more on this aspect see our article – Preparing for Retirement.
  • is there likely to be a significant cost to make the change from current residence?
  • are there ‘dependants’ who will require your time (and resources?) during your retirement ?
  • is your health sound: and is it likely to stay sound up to and in retirement?
  • what financial requirement will provide you the comfortable lifestyle you anticipate for retirement at the desired date?

Planning retirement is a holistic process.

Answering to the above questions (and other questions that will arise in individual circumstances) your needs and expectations in relation to retirement should be cognisant of your prevailing circumstances. Particular attention needs to be given to each of the following –

  1. business structures (where business activity/ entities are involved): where business succession planning needs review;
  2. estate planning: ensuring attention has been paid to Wills and Enduring Powers of Attorney and that both are valid and current;
  3. existing income, accumulated wealth and associated cashflow; and
  4. existing life insurance protection (and other insurance policies).

Is your proposed retirement date earlier than a superannuation condition of release?

Special care – and in most situations, advanced planning – is required if the proposed retirement date is prior to having met a condition of release of superannuation funds. Superannuation funds cannot be accessed prior to the preservation age unless some other condition of release is met (and that would not be compatible with an early retirement strategy of the type we are considering in this article); and also, where the preservation age allows access, but you are still under the ‘tax-free pension’ age, there will be some taxation considerations to be borne in mind.

You know we can assist you in planning your retirement –

The wealth management professionals at Continuum Financial Planners are just the right people to help you work through the questions that need to be considered to be able to answer the lead question appropriately. They will listen to you; they will ensure they understand your needs; they will provide solutions – and we offer ongoing service (through which you will experience that we care about your personal situation).

To ensure you are ready for retirement on your terms – and that you benefit from the experienced wisdom of one of our advisers, call our office on 07-34213456; or use the Contact Us facility at Continuum Financial Planners website.

(Originally posted in March 2012, this article has been refreshed and re-posted in January 2015; and again in May 2016)