You’re in your 60s.
You’ve had a long work history and you might be wanting to try something new. If you’ve been able to build your retirement savings, here’s hoping they are larger, but it’s understandable that you might be worried about how to protect that nest egg.
You might have given more than a thought about how to draw down on your savings when you finally stop working, and you might be asking yourself ‘just because I’m almost able to collect the Age Pension, should I?’
When you get to this stage of life checking your insurance needs, updating your will, and potentially moving to wherever you might want to live out your retirement are all careful considerations you’ll be making at this stage of your life. But there are also some important financial milestones you should aim to accomplish within the next 10 years or so.
1. Be realistic about your retirement income
Now is the time (if you haven’t done it already) to do the math about how much money you’re going to need in your retirement. A lot of super funds have calculators that can help estimate the income you might need, as does the Australia Securities & Investment Commission.
Be sure to include other sources of income when doing your calculations, including any pensions you might be receiving, and adjust your plan to accordingly. It might mean you look at ways to slash your household costs or put off retirement until you have saved more money.
2. Deciding when to take pension
You’re only eligible for the Government’s Age Pension when you turn 65, but if you are under that age you can keep working while drawing down on some of your super benefits. It’s what is known as the ‘transition to retirement’ and you can use the policy to supplement your salary and maintain a comfortable lifestyle.
Consider your health, income and likely expenses in retirement before you make a decision, and if possible talk to a financial advisor who can help you understand the options available to you.
3. Where will you live
You might have spent much of your life in the house you raised your children in, but not it is a little on the large size. A lot of baby boomers look to downsize, selling their home and using the money to money to move into something smaller. Another option is moving interstate or overseas for your retirement. If any of these situations are you, look to make a plan now.
4. Review and update your health insurance
Now is a good time to look at the health care expenses you might face in retirement that you aren’t currently covered for under your health insurance plan.
5. Check your life insurance
While you think this one is for the benefit of any children you might have, it’s not as cut and dry as that. Yes, this is one element of life insurance, but another has to do with your spouse or partner. You might want to ensure they can afford to cover the house repayments or other bills, including funeral costs, once you die.
6. Update your will
It’s not the sort of thing you would look at on a regular basis, but if it’s been some time since you reviewed the contents of you will, now is a good time to tackle the task. Make sure the family members and friends named in it are all still alive and think about what interest they might have in the assets you’d like to leave them.
If you’ve been divorced you might want to reallocate the money or belongings you were going to allocate to them to your children or someone significant in your life.
Take the time to decide who will look after your finances if you become unable to do so yourself, and while you’re at it put into writing your health care wishes for an emergency situation.