Category: Retirement Planning

A significant challenge for people when planning for retirement is knowing how much money they need to save. This is different for everyone as it depends on your financial situation and ideal retirement lifestyle.

You may be wanting to achieve early retirement, and if that’s the case, planning ahead is essential. You may want to consider checking if your superannuation account is performing and whether or not you need to make extra contributions to grow your savings. You may want to consider starting an investment portfolio to provide you with an additional income source for your retirement income.

There are many financial strategies you can take to help ensure you meet your retirement goals. To help you choose the right strategies, it may be beneficial to seek personal financial advice. A financial advisor can help you develop your retirement plans and get you on the right track to achieving your dream retirement.

This article will explore how you can prepare your finances by planning for retirement. The sooner you start, the more opportunities there are to grow your nest egg.

Here’s what you need to know:

How Much Retirement Savings Do I Need?

The amount of money you need to save for your retired years will depend on your individual wants and needs. You may want to secure a comfortable retirement, which can look different to everyone and how much income you’ll need to fund this lifestyle is dependent on your personal circumstances.

According to the Association of Superannuation Funds of Australia (ASFA), here are the average annual income you will need in retirement (estimation for a person aged 65, who is in good health and who owns their own home):

• For a Single Person: $43,687 per year
• For a Couple: $61,909 per year

Image source: https://www.amp.com.au/retirement/prepare-to-retire/retirement-money-needs 

How to Get Started Planning for Retirement

You may want to start by determining your financial goals and the strategies you can use to help achieve them.

Once you’ve listed your goals, you may want to consider your

• Investment options
• Your super fund investment strategy and if it’s tailored to your risk tolerance
• Where you want to live
• What your lifestyle looks like

A financial planner can help you determine what you need to consider when planning for your retirement and ensure you have the right financial strategies in place to secure financial security for your future income.

Determine Your Needs and Wants when Retirement Planning

Think about what monthly expenses you have now. These may include rent, food, healthcare, entertainment, gas, and other discretionary spending. You may want to use a budget calculator to help determine what you spend each month.

Create a budget for your expected retirement expenses. The budget should include everything you spend now, plus the additional costs you will have when you retire. You should consider your family size and whether you have a mortgage or annual expense payments. 

Project your income, and subtract your projected expenses from it. If your income is more than your expenses, you are on the right track to a financially secure future!

Creating a Budget For Your Retirement Income

Your budget should include information about your expected income and expenses. The budget should also have a breakdown of your expenses and savings goals. You may want to have a written document outlining your retirement income, projected expenses, and goals. By doing so you can keep track of your income and expenses either online or on paper to make sure things balance.

Better yet, you can include this budget within your financial plan with your adviser and have it reviewed annually, so you can ensure your financial strategies are up-to-date and in line with your personal circumstances.

If your retirement budget includes sufficient regular income to fund your expenses, you should be able to retire comfortably. If you have a gap in funding and need more money to meet your goals, you may need to adjust your finances and strategies to achieve them.

Develop Your Retirement Plan

Many Australians start retirement planning at least 5 years before they retire. You may want to seek a financial adviser who can provide you with tailored strategies and develop a plan that will meet your needs and wants. The important thing to consider is making sure your assets are managed to reach your goals and that your income is sufficient to handle your expenses.

An adviser can help you navigate what your retirement income options are and how you can build your nest egg to help you fund your ideal retired lifestyle. This is usually part of their retirement planning process and can help guide you through options such as:

• property investment and how to manage your investment property as a retiree
• the right investment decisions to offer you steady investment returns – now and in the future
• debt recycling
• contributing to your super fund

Start Your Retirement Plan Today To Secure Your Financial Future!

You can live comfortably during your golden years, by planning ahead and considering your retirement income options. It’s important before you retire, to keep an eye on your budget and make adjustments to your retirement plan when needed.

If you are looking for reliable and expert financial advice in Hornsby, we can help you. Hyland Financial Planning was founded on the desire to build a collaborative relationship with our clients. Our financial advisers share an ambition to improve the lives of their clients with strategic planning, wealth creation and ultimately — wealth success, leaving nothing to chance.

Contact us today to learn more and get started!

Or Book a 15-minute FREE Call!

When you’re investing for retirement, you naturally want to know what your options are. Whether you have recently retired or are still a part of the workforce, you may find this quick guide to retirement investments from your trusted financial adviser in Hornsby helpful:

Investments for Retirement: What are your options?

To begin with, you may want to understand the types of investments you can choose from, which offer different rates of return, different liquidity levels, and risk factor.

Then you should consider mapping out your investment goals and how they will contribute to your financial future.

By gaining personalised advice, you can make informed investment choices, and be on track to achieving a comfortable retirement.

You can then evaluate each option for the specific goals you’re working towards for your ideal retirement.

What are the available types of retirement investments to increase your retirement savings?

The following are different types of investment options that you might consider:

• Cash Investments: You may consider putting your cash in low-risk, short-term obligations, such as a deposit account, that can provide returns in the form of interest payments.
• Equities: Are simply shares in the ownership of a company. They are the same as stocks, where if you buy stocks, you’re buying equities. They are considered high-risk as the market tends to be more volatile. 
• Annuities: They are financial products, that can offer you a guaranteed income stream during your retirement.
• Bonds: Bonds are when you can lend your money to an issuer either government or cooperation, in exchange for interest payments and the future repayment of the bond’s face value.
• Real Estate: You may want to consider purchasing an investment property and renting it out to be able to benefit from regular payments and use it as a form of retirement income.
• Exchange-Traded Funds (ETFs): Investing in ETFs are similar to investing in stocks as they trade on regulated exchanges. They track broad-based or sector indexes, commodities, and baskets of assets.

What Are Your Investment Timeframes?

Consider your investment timeframes when retirement planning.

How long do you plan to invest your money? Some people reach their retirement goals in 10 or 20 years, while others want to invest for 30 or 40 years. You may want to include your investments and time horizon within your retirement plans.

It’s vital that you understand this because it can affect your overall retirement plan. For example, if you want a short-term investment, you may want to consider an investment that’s liquid, and doesn’t lock you in for an extended period.

Why Is Diversification Important for your Retirement Investment Portfolio?

There are two reasons why it’s so important to diversify your retirement investments.

1. By spreading your money into different types of investments, you can potentially reduce the risk of significant losses and protect your investment returns.
2. Diversification can allow you to maximise your return over time, which can put you in a better position to meet your retirement goals.

A diversification strategy can maximise your risk/reward. If you have too much of your money in a risk-free investment, such as a bank account, you won’t usually see a high return. On the other hand, if you put too much of your money into an investment with a high risk, there’s a high chance of losing a fair amount of your money.

By diversifying your investments, you can balance risk with return, keeping a significant portion of it in low-risk investments and the rest in slightly riskier investments. This is so, when one investment isn’t performing there’s a chance the other investment is still providing a return.

For more on diversification, check out our blog to learn: How to Build a Diversified Portfolio that Matches Your Investment Risk Tolerance.

If you are unsure about what investments you should make for your golden years, you may want to seek a trusted financial planner who can offer advice on the tax implications of investments, fees and potential risks involved. They can inform you, after considering your financial situation and financial goals, of what investments may be most suited to include in your financial plan.

Seek Expert Advice from a Qualified Investment Adviser for Your Retirement Planning

If you’re planning to invest for your retired years, then you’re doing a great job of planning ahead. Having a plan in place can provide you with the best chances of reaching your goals.

Hyland Financial Planning offers you the services of an experienced financial adviser in Hornsby who can help you understand the ins and outs of investing to help grow your nest egg.

Contact us today so we can discuss your options!

As life expectancy continues to increase in Australia for both men and women, retirement years are extending. 

According to the ABS, the average age Australians are retiring is currently 55.4 years.¹

By the time you would like to retire, it would be beneficial to have a financial plan and be able to look forward to achieving some of your retirement goals. If you haven’t started planning for your retirement, it may be worthwhile to start planning as early as today. 

Having a sound retirement plan that provides you with tailored financial strategies to grow your savings, can help you achieve your ideal retirement. 

After all, the earlier you start thinking about retirement, the more time you have to grow your retirement savings and be on track to securing financial freedom. 

If you are approaching retirement, it may be beneficial to seek an experienced financial adviser, who can provide you with strategic retirement planning advice and help you get on track to achieving a comfortable retirement. 

Here are 4 ways to get you one step closer to securing your dream retirement:

#1: Determine Your Retirement Lifestyle and Your Needs

If you are nearing the end of your working years, you may want to ensure you have everything in place to be able to live comfortably during your retirement years. You may want to ask yourself the following questions:

• What does your ideal retirement look like? 
• Will you need additional funds for travel and larger expense items? 
• Will your retirement savings be enough to continue your current lifestyle?

According to the Association of Superannuation Funds of Australia (ASFA), the minimum annual cost of a comfortable retirement is $45,962 for singles and $64,771 for couples. This includes the cost for:

• Your daily living essentials; 
• Your health expenses such as health insurance, medical appointments, exercise resources; 
• Your lifestyle/hobby expenses; such as food outings, attending sports games, visiting the local club etc;
• Travel costs for an overseas holiday or visiting family members interstate. 

By planning ahead, you can have a good idea of what your needs and wants are for your golden years and understand how much you need to save for your retirement. You can use certain financial strategies that will help you grow your savings and be on track to achieving your ideal retirement lifestyle. 

Check out our blog to learn more about: How much you should save for retirement?

#2: Make Extra Contributions To Your Superannuation

Many Australians rely on their superannuation to fund their retirement. However, if you haven’t checked to see if your super is on track to fund your ideal retirement, it may be time to check and possibly make extra contributions to give it a boost. 

Boosting your retirement savings through making extra contributions to your super can help get you one step closer to securing your financial future. 

While your employer must be paying the super guarantee of 10% of your income to your super fund, you are entitled to ask your employer to pay more of your pre-tax income to your super. These payments are called concessional contributions and are taxed at 15%, which is usually lower than the marginal tax rate. This is known as a salary sacrifice. 

However, it’s important to note that you must not exceed the concessional contribution cap of $27,500 per financial year when you combine the total of your employer and salary sacrificed contributions. 

Do you have more than one Superannuation Fund?

If you have multiple super funds you may want to consider consolidating them as soon as possible to save money on fees.

If you are unsure of how many super funds you have acquired over the years, you can check through your myGov account or the ATO.

#3: Consider a Self-Managed Superannuation Fund

Many people today choose to transfer their super to a self-managed super fund (SMSF). An SMSF allows you to have more control over your retirement savings including how your super fund is managed and how to invest the balance. This option is especially suited for those who have extra money they want to invest in something more than just stocks or shares.

However, SMSFs come with substantial responsibilities. If you’re unsure about which step you must take, you may want to consider seeking an expert financial adviser who can help you make an informed decision based on your personal circumstances. 

#4: Seek Tailored Advice From a Financial Adviser

When seeking expert advice from an experienced retirement planner, they can help you by providing you with the financial roadmap to achieving your retirement goals. This can include providing you with the right financial strategies to grow your nest egg and get you on the right path to securing your ideal future. 

At Hyland Financial Planning, we provide you with a retirement plan tailored to your financial needs and wants in life to ensure you can achieve a retirement that is comfortable and worry-free.

Hyland Financial Planning can help you with your retirement planning

Hyland Financial Planning’s financial advisors are dedicated to forming a collaborative relationship with you. We share your desire to improve lives through strategic planning, wealth creation, and wealth success.

Through our retirement financial advice, we hope to help clients develop a sense of preparedness and stability for anything that may come their way. Seeking financial advice in Sydney or Hornsby?

Book a complimentary 15-minute call today!

References:

1. https://www.abs.gov.au/statistics/labour/employment-and-unemployment/retirement-and-retirement-intentions-australia/latest-release