Aug 21, 2017

When mapping out your retirement, the most important thing to remember is this: the sooner you start planning, the more options you’ll have.

So even if you feel you’ve a long way to go before retiring, now is the best time to start the process. Taking the right steps can help you avoid these common retirement planning mistakes.

1. Be Realistic

If you think that saving up for a comfortable retirement is an impossible goal, then you’ll only be discouraged from trying.

When you consult with a financial expert, you’ll find out that a successful retirement is achievable. With a positive attitude and plenty of planning, you’ll be just fine!

2. Weigh Up Your Retirement Options

There is your super fund, of course. You may qualify for an age pension. Investments made now can pay off by the time you’re ready to retire. The best part is that you aren’t necessarily limited to just one means of saving.

There are even ways of investing with your super fund.

Now that you’ve got an idea of the retirement routes you can take, it’s time to look at your unique needs.

3. What Will You Do With Retirement Funds?

Almost everyone is nurturing a personal dream for retirement. Some want to just enjoy their extra time with family. Others look forward to fine-tuning a hobby or skill,

To properly save up for retirement, you first have to know how much money you’ll need.

Don’t just wing it and see how you go!

New car, expensive holidays and shopping trips can eat up your hard-earned savings faster than you realise.

On the other hand, some individuals needlessly worry about their money running out too soon.

You can avoid both scenarios by carefully planning out the use of your super fund in advance. With the proper advice and research, you can manage your super successfully.

For instance, you’ll want to think about what kind of budget you can afford to live on in retirement. Groceries, rent or home maintenance, vehicle expenses and more should all be factored in. Determine your yearly expenses, account for potential rises in cost and multiply that by the number of years you expect to retire for.

In addition to your living budget, you may have some big ticket items:

  • Trips and holidays

  • Relocating

  • Home renovations

  • Major surgeries

  • Gifts and charity donations

Some of those major expenses may be planned while others turn up suddenly.

Once you’ve determined your goals and priorities, and done your best to anticipate how much money you’ll need in retirement, it’s time for the next step.

4. Put It Down In Writing

This step is critical when planning any financial endeavor but people all too often minimise its importance.

When you get your retirement plans down in ink, they become much more concrete. Plan a visit with an experienced financial adviser to design a realistic map of your retirement dreams.

5. Get Debt Under Control

Now that you know which direction you’re headed in, it’s time to take action.

Even if you’re not in a position to save up much at this time, you can do yourself a big favour by skillfully managing debt. Pay off outstanding debt as soon as you can to minimise interest. This will get you closer to reaching your savings goal.

Planning to live “the real life” after retiring and achieving certain dreams can require a few sacrifices right now. A little budgeting and self-discipline will go a long way towards helping you grow your wealth.

You may even plan on working a little later than you first intended. Working a few years past typical retirement age can help you keep saving while enjoying senior benefits.

6. Be Prepared To Make Adjustments

Even well into retirement you may have to make some changes in line with changing circumstances. Keep an eye on the economy and adjust your budget accordingly.

Want more help organising your finances to prepare for retirement? It's crucial to seek expert advice.

For smart saving strategies and more tips on figuring out your retirement plan, talk to the team at Calder Wealth Management. Call us on (08) 8373 3333 to schedule your appointment.

Written by Ben Calder, Private Client Adviser at Calder Wealth Management.