The age of retirement in Australia isn’t set in stone, meaning you can retire at 60, 50, or even 40 if your finances are in order.
You have the right to retire anytime you choose, but your health, financial position, job prospects, and personal preferences may all play a part in your plans.
Like with any new chapter in your life, preparation may go a long way toward ensuring you’re emotionally and financially prepared for the road ahead. However, despite these opportunities, just 44% of Australians over 40 believe they are prepared and equipped for retirement.
To help you plan your retirement successfully, here are some essential tips:
Know the Figures That Will Give You a Comfortable Lifestyle
Planning and saving for retirement may help you economically prepare for the future. Knowing the correct dollar figures will let you know how much you need to save for the years ahead.
According to research by the ASFA, a retiree would need an annual budget of around $28,000 to live a modest or basic lifestyle in retirement. However, for a more comfortable lifestyle, it is estimated that an individual will need approximately $49,000 per year.
These figures can be helpful when you consider your retirement plans, but remember, they are only a guide!
Once you know what your retirement budget looks like, you can consider how you will get the income. That may be your superannuation fund, government pensions, savings, or investments.
Learn How and When to Access Your Super
Your superannuation plan could significantly impact your retirement financial plan, so it is helpful to know when you can access your super. In general, you can begin accessing your super after you reach your preservation age, which ranges between 55 and 60 years old depending on when you were born.
You’ll have a few different options when you access your superannuation.
You may use a transition to retirement pension (TTR) to access a portion of your super balance while continuing to work full-time or part-time. If you wish to fully retire, you can take your super out as a lump sum. Alternatively, if you prefer a monthly income stream, you can transfer it to an account-based pension or annuity.
The way you decide to access your super can have various tax consequences, so seeking guidance from expert financial advisors on superannuation might be beneficial.
Decide Whether You Will Stay Put, Relocate or Downsize
Your retirement living choices should also be considered as part of your financial plan.
Your health, spouse, family, and the activities you choose to pursue will also play critical roles when you retire. If you’re considering downsizing to free up equity in your home, preparing ahead may help you feel more in control and offer more peace of mind since you can estimate any out-of-pocket expenses ahead of time.
Alternatively, if you are planning to relocate, consider how this will affect your finances.
Check If You Are Eligible for Government Entitlements
Many Australian retirees will be eligible for the age pension to help fund their retirement.
As well as your earnings and savings, government benefits such as the age pension, Carer’s Allowance, and the Disability Support Pension may contribute significantly to your retirement cash flow.
Start retirement planning today!
It is never too early to start your retirement plan. The earlier you start, the more opportunities you will have to secure your dream retirement.
Secure your financial freedom by doing retirement financial planning as early as today! At EJM Financial Services, our professional and experienced team of financial advisors in Melbourne can assist you in preparing for your retirement.
Book an introductory call with us now and take the first step to secure your golden years.