Financial Independence Starts With a Plan

Whether retirement is at the forefront of your mind or simply a distant future, there is never a bad time to start planning for life after work. The team here at Wealth Depot have created a list of tips and things to look out for when planning for retirement to make the transition as enjoyable as possible.

Fundamental to a comfortable and secure retirement is the preparation that goes into it. Planning for retirement can be likened to building a house – you need a strong foundation for a longstanding structure. To maximize the longevity of your hard-earned money, it is important to utilize the right investment vehicles and set up appropriate strategies. As such, it is crucial that you firstly establish when you plan on retiring and what financial position you want to be in for retirement. This way you can choose strategies that will be effective in helping you achieve your goals. As always, the team here at Wealth Depot would love to help you achieve your retirement dreams.

Your superannuation plan can make a significant difference to your financial planning for retirement, so it’s handy to have an idea of when you can (and will) access your super. Normally, you can start accessing super when you reach your preservation age (55 and 60), varying from when you were born.
As for how you can maximize your super – you will have several options. For greater financial flexibility, you could access a part of your super account though a transition to retirement pension (TTR) as you continue to work on a full or part-time basis or casually. If complete retirement is your intention, you can choose to take your super as a lump sum or move it into an account-based pension or annuity. These options provide a regular income stream. Furthermore, you could have a self-managed superannuation fund to maximize control of your investments. It is important to note these strategies encompass different tax implications for different personal situations and should be consulted with your financial advisor.

When transitioning into retirement, you should also be aware of the following matters that may have not been on the top of your mind in the past.

Insurance
While you might have insurance, it may be worthwhile checking if it is a suitable cover to have when transitioning into retirement. As your current lifestyle could be a lot different post retirement, your cover requirement may also change.

Investment preferences
Investments are a component of many retirement plans however it is worth reviewing your investment strategies and the options you have chosen that best accommodate your new lifestyle and goals. This could be changing from an aggressive investment strategy to a more conservative one to protect your nest egg or investing in passive income rather than growth investments.

Estate planning
Finally, estate planning is another element of retirement that needs to be considered. Have you documented how you want to distribute your assets when you pass and how you want to be looked after if you can’t make decisions later in life? These considerations may be well into the future, but they are decisions that will need to be made.

Whilst the financial side of retirement is obviously important, it is just as important to highlight the change of lifestyle and how that can affect you emotionally. Traditionally, retirees experience a ‘honeymoon’ phase when they initially retire. During this period, retirees can enjoy all the luxuries of retirement such as travel, hobbies, and relaxation. It is also common for retirees to experience emotional lows due to a lack of routine or the change of lifestyle. These emotions are perfectly normal and vary from individual however it is important to be aware of your mental state. The team here at Wealth Depot care about you mental well being and recommend seeking out help if you are experiencing these emotions.

Planning for retirement is an exciting time in your life so it is essential you make the most of what you have worked hard for. Getting a head start and being pro-active are the greatest ways to make the process simple and easy. This way you can spend retirement living your life to the fullest. 

Reference:
-ATO website
– Nationwide Website
-My Wealth Solutions