Author: Simon Hoskin
When working with people who are approaching retirement the most common question I’m asked is, ‘can I retire?’ Giving an answer is not that simple.
I usually respond by asking them three questions:
- Are you ready for retirement?
- What plans do you have?
- Do you have any idea what your retirement budget is?
At this point, clients usually look at me and say, ‘I am ready for retirement but don’t know what I am going to need’. Everyone’s retirement is different and individual to them, therefore, everyone will have a different budget in retirement.
During pre-retirement discussions, I spend a lot of time with my clients identifying their retirement dreams, goals and aspirations. Once I understand their ideal retirement lifestyle, whether it be spending time with family, travel or even downsizing and moving to their favourite holiday destination, I can start to determine their retirement expenses and the required level of income.
Retirement budget considerations
When trying to work out your retirement budget, there’s a few basic considerations you should factor in:
- What are your normal living expenses, excluding any capital expenses like car replacement or holidays? Think of this as your replacement wage in retirement, that is, your normal weekly income.
- What capital costs do you anticipate in the next 10 years, for example, a car, furniture or white goods?
- Do you have travel plans that may be costly, perhaps an overseas trip to Canada, Alaska or a European river cruise?
- Are you planning on leaving certain estate items or amounts to your children?
If you are unsure where to start, various websites have sample budgets available such as MoneySmart Budget Planner or ask your Financial Adviser for assistance.
Your budget will make you choose what is important to you in retirement; and in my role as your Financial Adviser, will help me to identify the most effective strategies to make sure you can achieve your best retirement possible.
If you try to avoid paying advice fees by relying on tips from family and friends or general advice from media presenters, you could be following a dangerous path.
I believe a properly constructed Retirement Financial Plan is the most important document you will have once you decide to leave work. The money spent on financial advice in preparation for retirement can often be more than recovered in the value of the advice that you receive, for example, the efficient structuring of your assets can potentially minimise tax and maximise your Centrelink entitlements.
The Central Coast Financial Planning Group Retirement Specialists are here to support you through your retirement journey. If you would like a complimentary meeting with one of our Retirement Specialists, please book here or call to make an enquiry.
DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.