Money

Tips to ensure your retirement is financially comfortable

Aug 29, 2016

When it comes to your financial future the onus is on you to get the planning right, and let’s be honest there is no shortage of advice to help you along the way. Setting yourself up for a financial comfortable retirement isn’t as complicated as you think.

1. Think about your retirement from the moment you start saving
Okay, so the timeline on that might have stretched out a little, but it’s not too late. Think about these major financial decisions: a car, your house, your health, any travel you are planning on doing, and whether you would like to help your children financially (and how often), which will help you decide how much money you will need for retirement.

You’re also going to need to factor in your age. Say, for example, you are 65 and you expect to live until you are 90. According to Noel Whittaker you will need to accumulate approximately 15 times your expected expenditure.

2. Have a plan and make goals
If you don’t have a written plan and retirement strategy you’re putting your retirement at risk. With small goals and the decisions you make each day, you will have success. However, while a plan is important it is even more important that it is realistic. Consider this, if you are currently enjoying a modest lifestyle with champagne and five-star dining if you don’t set realistic goals you are not going to like the look of that beer budget come retirement day.

3. Age matters
You need to know when you are planning on retirement (if you haven’t already) because this will help you further plan the number of years you will need your retirement savings for. Also consider your life expectancy, for if you don’t — and it’s a common mistake — you might outlive your savings.

4. Your money needs to be hard to reach
We’re not talking about storing your money at the back of a cupboard, what we mean is that you need to have a level of discipline that makes it hard for you to head for your retirement savings when things get rocky.

If you’re a smart investor you’ll be putting your retirement funds into a hard-to-access, tax deferred retirement plan.

5. Don’t forget insurance
Protect your retirement plan by taking out insurance. It’s a risk management principle and the types of insurance you’ll be wanting to consider include life insurance, health insurance and long-term care.

This level of cover can play a big part in your estate planning and make an even bigger difference to your retirement years.

6. Get a life — an amazing one
While the money you will need for your retirement can consume your thoughts, there is more to your retirement being comfortable and happy than just the cash. What engages your interests and fulfils you?

Don’t let money be the sole priority as you move into this next phase of your life. You need to invest time into relationships, your health and those things that will nurture and build you. Naturally, this will be much easier to achieve once your financial goals are in place.