Planning your retirement? Consider these top ten tips

Looking forward to an enjoyable retirement? Learn how to prepare with our top ten tips on retirement planning.

Tip one: Picture your ideal retirement

Retirement looks different for everyone, so take some time to imagine what your ideal version would be. Forget about the numbers for a moment. Instead, think about what you’d love to do, where you’d like to be, and start jotting down a few goals to work towards.

Questions to ask:

• How do you want to live in retirement?
• What kind of holidays do you want to have?
• How much will this cost?
• What is the balance of your superannuation and other investments?
  • Do you think these will support your lifestyle?
  • If not, what actions do you need to take?

Tip two: Map out the income you’ll draw from investments, superannuation, and aged pension

Most people are retired longer than they expect. If you are healthy and retiring now, you could expect to live into your nineties or older, which could mean more than 30 years relying on your assets for income. 
Therefore, it is essential to structure your investments appropriately to ensure your assets last throughout your retirement, while also factoring in the impact of inflation.

And remember that as you get older, the likelihood of higher medical expenses and needing extra assistance increases. Make sure to plan for these potential expenses to safeguard your financial wellbeing in later years.

Tip three: Review your shares and bonds: Adapt your investment strategy for retirement

In the years leading up to your retirement, you will want to focus on capital growth to ensure your investments are building wealth. Although this is still important in the retirement phase, your priorities shift. Generating a reliable income becomes essential as you begin drawing down your investments to cover everyday expenses.

This means you will likely need to diversify your investments to help reduce your risk and achieve smoother, more consistent returns throughout retirement. Make sure to review your overall investment strategy in the lead up to retirement to ensure it aligns with your financial goals and supports your desired lifestyle.

Tip four: Planning your retirement investments and sticking to your investment plan

The value of your investments can change quickly. As you get closer to retirement it is important to review your tolerance to risk and how comfortable you are waiting for markets to recover. You will need to weigh this up against the returns you need to achieve your desired retirement income and develop an investment plan that supports your goal.

Avoid panic selling during market downturns, as this often results in poor outcomes. It is better to stick to the plan as much as possible to achieve the best long-term results.

Tip five: Get your tax structure right

Beyond selecting your underlying investments, it’s equally important to ensure they are held within the right structure. This can help reduce tax liabilities and may even increase your Centrelink benefits. 

Investing your retirement savings in structures such as superannuationcan can have a significant impact on your tax liabilities, and those savings definitely add up over time.

Tip six: Secure your retirement savings for future beneficiaries

Although our lifespans are increasing, none of us will live forever. Dying without a will may not be a problem for you, but it could create significant difficulties for your children. Thoughtful estate planning ensures your assets are transferred to the intended recipients at an appropriate time. 

Make sure you have a will in place. You should also speak with your solicitor about an Enduring Power of Attorney and medical care directive. These can help your family fulfil your wishes if you’re not able to make decisions yourself. And remember to review your estate plan at least every three years to keep it up to date. 

Tip seven: Stay mentally and physically active

If you stay mentally and physically active, you’re far more likely to enjoy a longer and healthier retirement. 

Regular exercise, whether it’s walking, swimming, or joining a local fitness class, helps to maintain strength, mobility, and overall wellbeing. 

Staying engaged mentally is equally important: consider taking up a new hobby, learning a language, or enrolling in a course to keep your mind sharp. 

Working part-time or volunteering within your community is also a great way to maintain a sense of purpose while fostering social connections, which can combat loneliness and improve your quality of life. 

Tip eight: Consider downsizing 

Is a sea change beckoning? It can be a big decision to move from the home you’ve spent so many years in.

Downsizing your home in retirement can be particularly beneficial, especially if you’re seeking a more relaxed and manageable lifestyle. Moving into a smaller property can mean less maintenance as you get older.

If your new property is at a lower cost, it can also give you additional cash which can be invested to help boost your income and support your day-to-day financial needs. This additional financial flexibility can make it easier to pursue hobbies, travel, or simply improve your overall quality of life during retirement.

Tip nine: Plan for the unexpected

Life is full of events you didn’t anticipate or plan for. The last thing you need is for your finances (and retirement) to be affected if the unexpected happens to you.
Review your personal protection needs to make sure you are adequately protected in the lead up to retirement.

And don’t forget health and travel protection, especially if you plan to join the grey nomads.

Tip ten: Seek financial advice to make the most of your superannuation and retirement savings

Making financial decisions can be complex and there are many unknowns. 

Getting the right advice early enough can make a big difference to your retirement.

For more help, contact your local RSM office and talk to an adviser today.