Retirement Planning – Finance
Are you ready to retire? Wanting to retire is different from actually being able to retire. Many people tend to have a set age in mind they want to retire at, but is that right for you?
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t's not just about being mentally ready to finish work or knowing what you will fill your time with. But have you considered your financial position and how you will fund your lifestyle once you stop earning a salary? When planning for your retirement financially it's important to consider: ◆ Superannuation ◆ Your home ◆ Debts ◆ Additional expenses ◆ Future health needs
Superannuation The preservation age in Australia for retiring, which is when you can start accessing your superannuation, is between 55 - 60, but you need to be at least 65 before you can receive the age pension. So you need to look at whether this fits with your current wealth. You need enough money not just to afford your bills, but also to fund the lifestyle you want to lead in retirement. The Association of Superannuation Funds of Australia (ASFA) developed Retirement Standard benchmarks to help people gauge how much they may need a year to live modestly or comfortably in retirement. For instance, based on current rates, to live a comfortable lifestyle as a single person, you would need $48,266 a year, or $68,014 as a couple. Or to live modestly, a single person would need $30,582 a year, and a couple would require $44,034 a year.
The benchmarks also include a standard of $545,000 in savings for a single person retiring at 67 years of age, or $640,000 for a couple retiring at the same age. These numbers are also based on the idea that you already own your home, have no mortgage, and are in good health, so they won’t work for everyone. Consider your lifestyle, and expectations for retirement and balance the reality of your financial situation.
You need enough money not just to afford your bills, but also to fund your lifestyle.
Home now and into the future A big part of both your financial situation and your lifestyle is your home, so considering what your housing situation will look like for the first decade or so into retirement is important. Do you own your home already or plan to finish paying off a mortgage before retiring? Is your house bigger than what you need and will you look to downsize or move into a retirement village? Looking ahead, to what your home might look like if you become more frail or have impacted mobility, is also important. Do you see yourself living in the community with home care if you need it, or would you rather move into an aged care facility? These are big decisions that you should think about now, so you’re not forced to decide in an emergency situation when you are stressed.
YourRetirementLiving.com.au
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