Ten ways to prepare for retirement
Australians should start planning for retirement well before they hit their 60s to ensure they have the funds and flexibility to retire when they want to and can feel at ease knowing they will be financially prepared.
Often people realise too late they don’t have enough funds to retire, and then have to stay in the workforce for longer. In particular, Baby boomers and late Gen Xs should be planning now to secure their financial future.
Here are some tips to help with retirement planning:
- Think about the lifestyle you currently have, and the one you want once you retire, how much you will need to finance this and when you want to retire. Is your plan achievable?
- Increase your personal debt repayments to help pay them off quicker so they don’t affect your retirement.
- If possible, consider making additional contributions to your superannuation fund now and use salary sacrifice to reduce your taxes.
- If you’re ready to start winding down a bit earlier, consider reducing your hours to part time and work for longer so that your super continues to build. For example, work four days a week and convert super to cover the income shortfall.
- It is also wise to speak to Centrelink about the requirements of receiving a pension and when you might be eligible to receive this.
- Make sure you have a will and it is up to date.
- Discuss your plans with your spouse to ensure you’re on the same page and have a clear understanding of each other’s needs.
- Check that your children have adequate insurance to avoid getting called on to help out if they find themselves in an unexpected finance dilemma.
- Continue to review your personal and financial situation in the lead up to retirement and make changes to your plans as you go.
- Speak to your financial institution for more advice on how to prepare for retirement.