6 key steps to making sure you have a successful retirement

Category: Australia & News

If you’re planning to retire soon, you’re probably looking forward to relaxing after 40-plus years of work.

It’s likely your stress levels will reduce as you no longer have to worry about work deadlines, and the daily travel to and from your workplace.

But beyond that, and maybe some high-level aspirations involving ticking items off your bucket list, what are you actually going to do?

It’s very possible that your retirement could last 20 years or more, so surely it makes sense to have plans in place?

Here are some suggestions of things you can start doing now, before you retire, to give you the best possible chance of having the retirement you’ve worked hard for.

1. Make sure you have a retirement plan

In the same way you had a plan to get you to retirement, it can help greatly if you have a plan in place for the period after you stop working. Better that than leaving things to chance!

For example, as you read in the introduction, you may well have a bucket list you’ve put together of things you want to do, such as overseas travel, take up a new sport, buy a new car, and so on.

But where do you want to travel to, and how much will it cost? Likewise, how much will a new car cost, and can you afford it?

With a plan in place, you’ll give yourself a better chance of doing what you want to do.

It doesn’t have to be too detailed at the outset, and you can update it as you get closer to retirement.

Your plan will be informed by some of the other items you’ll read here.

2. Know your financial position

Part of your planning process should involve having a good understanding of your financial status – both now and projected forward to your proposed retirement date.

Make a note of your current income and expenditure, and then put together a projection of what both will be once you finish work.

It’s likely your expenditure will decrease as you’re no longer incurring work-related expenses, but at the same time your income will also change as you start drawing on your retirement savings.

You’ll need a clear idea of your super fund values, as well as any other savings and investments you may have.

3. Bear in mind the state of your health could affect your plans

The state of your health is likely to have a bearing on your plans for retirement.

For example, if you’re intending to travel a lot, it can make sense to schedule that for when you’re younger and hopefully fitter. It’s also worth bearing in mind that travel insurance could become prohibitively expensive the older you get.

Additionally, if you have any underlying health conditions, you’ll want to factor this into your long-term planning.

As you get older, other issues may well affect your plans. You’ll need to consider the increasing cost of private healthcare, and the possibility of you needing long-term care.

4. Know where you want to live

If you’re already living where you want to retire, that’s fine.

If your outline plans involve another move before you stop work – or soon after – then you’ll obviously need to take that into account in terms of timing and cost.

For example, you may well be planning to move to a smaller, more manageable property, somewhere closer to your family, or a home in a quieter location.

If you are planning on moving to a smaller property, don’t forget the “downsizer” facility, which gives you the opportunity to make a substantial contribution to your super fund prior or during retirement.

5. Plan to keep active

Routines can be important. The day-to-day routines of working can often be boring, but at the same time they can provide valuable structure in your life that you could miss once you stop work.

That’s why retirement can create so much upheaval for many people.

So, it’s important to think about creating new routines and habits when you’ve retired. Staying active – both physically and mentally – keeps you stimulated and can help with your health.

One common piece of advice is to put together regular “to-do” lists and aim to tick off a certain number of items each week or month.

Once you get into the rhythm of retirement, and your children start to realise you might have spare time on your hands to spend with them and your grandchildren, you may want to drop the lists. However, the immediate period straight after you’ve stopped work is important and worth focusing on.

6. Decide on an immediate or a gradual retirement

One way of addressing some of the potential issues that could arise when you stop work could be not to retire in one jump, and instead consider a gradual or “phased” retirement.

Clearly the work you do will have a bearing on this but going down to two or three days a week could give you time to start experiencing and understanding what full retirement will entail, and so help you plan accordingly.

You could consider working on a consultancy basis for your current employer, or another company in the same sector. Alternatively, you may want to consider something completely different.

Get in touch

If you have any queries regarding your retirement planning, please get in touch with us.

Please note

The information in this article is general in nature. It does not take into account your specific circumstances and should not be acted on without full understanding of your current financial situation, future goals and objectives by a fully qualified financial adviser. In doing so, you risk making commitment to a product and / or strategy that may not be suitable to your needs.

The value of your investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances. All contents are based on our understanding of HMRC and ATO legislation, which is subject to change.