I’ve written about being Mentally Fit and Physically Fit in Retirement but will your Retirement be Financially Fit? You need to start planning now and not wait until you have retired – then it will be too late!
Most of us don’t really thing about our future financial situation in retirement. We work to pay off the mortgage, educate the children and hope we have enough superannuation to provide us with a comfortable lifestyle so that we can enjoy our retirement years without the stress of worrying about finances. My financial planner, suggests that we should be planning for retirement AT LEAST 10 YEARS BEFORE OUR RETIREMENT DATE! Women, in particular, can be the losers in the financial retirement stakes. With gender pay gaps, time taken out to have a family, experience divorce or being single, women are well behind in building a secure financial future.
[bctt tweet=”It is a fact that women will retire with less than men. “]
Of course, men can be affected also if their life changes. They may experience divorce, are made redundant or haven’t planned for their future.
[bctt tweet=”Will you have enough for a financially comfortable retirement?”]
Here are 5 things you can do NOW to keep you on track to a comfortable future.
1. Meet with a Financial Planner
My Financial Planner, has a tagline #everyoneneedsaplan. However, most of us have never had a professional Financial Plan or Assessment completed on our finances. Having a Financial Assessment will clearly define where you are and what you need to do to provide future financial security.
A Financial Planner can also suggest ways to utilise your assets and superannuation in retirement and what tax benefits are available to you. Should you take your superannuation as a lump sum? Should you have an annuity? Should you have a self-managed superannuation fund? All these questions can be answered by a competent and reliable Financial Planner.
If you are taking time out to have a family, this will affect your future financial situation. A Financial Planner will be able to design a plan to include these life-event changes.
2. Calculate how much you will need in Retirement
If you sit down and list what you think your future expenses will be in retirement and also include ‘wish lists’ such as regular holidays, entertainment and lifestyle, you may be surprised at how much you will actually need to retire. Again, a Financial Planner can assist with this or there are web-based calculators which will give you an indication of how much superannuation or other form of investment you will need, to have the lifestyle you want.
3. Have a Budget and stick to it!
Unless you are part of the ‘rich and famous’ our income is fixed and we all need to follow a budget. Unfortunately, we live in a ‘I want it now’ society so it isn’t always easy to stick to a budget. However, if you want to be comfortable in retirement you will need to learn to budget. This doesn’t mean you won’t enjoy life – it will mean you won’t incur huge debts which you can’t repay. Learning to budget now will mean retirement is comfortable and less stressful than it needs to be.
Do you know if you are adequately covered? There are various types of insurance which are recommended and should be evaluated regularly to make sure you have adequate cover.
Life insurance is sometimes included in superannuation funds, however may not be adequate.
Income Protection Insurance – Are you covered if you have to stop work through accident or illness? This can affect your future financial position if you aren’t.
Medical Insurance – Do you have medical insurance and do you know what you are covered for?
Home & Contents – Are your possessions adequately covered?
Home – Is your home insured. So many times we see people lose their homes to fire or flood and they aren’t insured. This is probably the most valuable asses you will own so you need to insure it.
Funeral Insurance – This is not something we like to think about, however, it is important that you know your family won’t need to have the added burden of finding the funds for your funeral. They will be emotional and stressed enough without this. Funeral insurance is relatively inexpensive, so investigate this option rather than leaving it to your loved ones.
5. Start a Savings Plan Now
Credit cards are useful in an emergency but they shouldn’t be the ‘go to’ choice. A savings plan for holidays, house maintenance, lifestyle and ‘rainy day’ expenses should be part of your budget. Start a savings plan now, however small the amount will be another good habit that will help you in your retirement years.
Will you need $1million to retire?
Read more about planning your financial requirements for retirement here http://www.skynews.com.au/news/national/2015/09/23/do-you-need–1-million-to-retire-.html
Retirement even at 50 may seem a long time off, especially as we are living and working longer. We can’t assume that there will be a government pension in the future for everyone, so start thinking about how you will fund your retirement so you can enjoy these fabulous years!
[bctt tweet=”Plan NOW for a financially fit and comfortable retirement”]
Let’s Keep Sizzling!