Earlier in the year, the Government announced an increase in the qualifying age for the Age Pension (70 years-of-age by the year 2035). Headlines were filled with doomsayers warning that some Australians may find themselves remaining in the workforce for longer than they’d planned. However, if you plan for your retirement, you may not need to rely on the pension to support your lifestyle as a retiree.
Ideally, the earlier you start planning your retirement, the longer you will have to grow a nest egg to enjoy once you leave the workforce. To this end, you may opt to make use of strategies like salary sacrificing, or making voluntary contributions to bolster your superannuation fund. Likewise, you may consider a Transition To Retirement Strategy (TTR) as you move into part-time employment and begin drawing a part pension.
So when should your retirement planning begin? Needless to say, the sooner the better but the critical savings period is likely to be the five years prior to your planned retirement date. If you are an income earner aged in your mid to late fifties, and you’ve not yet begun to consider how you’ll put food on the table once your pay cheque stops, we would strongly urge you to contact us as soon as possible, so together we can begin to plan for your future.
If you’re in a partnership, this planning should ideally include both of you. When it comes to retirement goals, whilst you may dream of daily trips to the golf course and long lunches at the nineteenth hole, your partner may have very different aspirations like learning another language and living abroad. Similarly, one of you may want to continue working on a part-time basis to enjoy an ongoing income, whilst the other might aspire to leave the workforce much earlier.
We are accustomed to having these delicate discussions and helping both of you identify and articulate the type of retirement each of you is dreaming about. Once we have confirmed your objectives, together we can create a tailored retirement plan designed to realise those goals within your desired timeframes.
In some cases where these timeframes seem unrealistic, we can work through options including delaying retirement; exploring other income streams or supplementing retirement with part-time employment. We can also discuss an appropriate risk strategy aimed at countering any market shifts or other unexpected events that could potentially derail your retirement plans. Failure to plan for your retirement could restrict your choices about where and how you live in retirement. Additionally, you could find yourself forced to access funds you may have earmarked for later use, including you and/or your partner’s aged care as well as plans for your estate and how you’d like your wealth to live on long after your passing.