Income investing: boost your earnings through investments
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
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Is there a more satisfying life milestone than retirement? You finally give up the 9-5 grind so you can put your feet up and enjoy the fruits of your labour. Whether it’s a round of golf each morning, an annual holiday to Europe, or comfy caravan trips north in the winter, life truly becomes a dream.
However, new statistics show an overwhelming number of Aussies aren’t financially prepared to maintain their ideal lifestyle when they retire. The average retirement age in Australia is now 56.3 years, while we’re currently expected to live to the ripe old age of 84 – which means you could be looking at 30+ years in retirement. You can use this guide to create your dream retirement bucket list and follow the financial planning tips to ensure you’re prepared.
If you’re young, you might be picturing a beach with cocktails and endless sunshine… but if you’re closer to retirement age, you probably have a more realistic expectation of how your retirement will go.
Nailing down the details of what you want (and where you want it) will help you make a sound financial plan. Answer these 6 critical questions and the pieces of your retirement puzzle will start to fall into place.
Urban or city life… tree change or sea change… do you want to downsize or move closer to your grandkids? Just like in your working years, deciding where you live in retirement is one of your most important financial considerations.
If so, where? According to the ASFA Retirement Standard figures in 2023, the average couple on a comfortable household budget spends around $2,000 on overseas travel, and more than twice that much on domestic travel ($4,400). If you’ve been holding off on travel until retirement and you have itchy feet, this could be one of your biggest expenses.
As we grow older, our healthcare costs increase. If you don’t have private health insurance, consider putting aside a monthly amount for medical expenses. If you have an existing health condition that requires regular medication or specialist visits, plan for these too. Aged care can also be a significant expense in the last few years of your retirement.
Retirement is the perfect time to dive into hobbies and activities you’ve been postponing. Whether it’s gardening, golfing, painting, volunteering, going to the footy, or learning a new language, hobbies can be a great way to stay social and meet new people now that you’re out of the workforce.
Many people enter retirement thinking they’re shopping for their ‘last ever car’. But you may end up buying another 3 or 4 cars in retirement as your circumstances change – especially if you want to switch to an electric vehicle or plan to tow a caravan around Australia or have room for the grandkids! Cars don’t hold their value as well as other assets, so they can be a significant expense most retirees overlook.
Think about the financial legacy you wish to leave behind. Do you want to set aside funds for your children’s (or grandchildren’s) future? Or perhaps contribute a charitable cause close to your heart? Planning your legacy will give you an amount you want to pass on, and you can work back from when planning out your spending.
It’s the classic retirement dilemma. Spend too much, and you’ll run out of money in your 80s or 90s. Spend too little, and you’ll regret scrimping and saving instead of living out your golden years in comfort. Like most things in life, it’s all about the balance. These tips will ensure you can tick your dream items off your retirement bucket list, without excess financial stress.
Managing your cash flow and creating a budget can give you peace of mind knowing you’ll hit your financial goals. If you’re not a big Excel spreadsheet person, you can use online tools like the MoneySmart budget planner to plug and play your spending.
You should have a general idea of how you’ll spend your money over the course of your retirement. Many retirees spend more money at the start and end of their retirement. They retire with a bang and buy a boat or caravan or take an around-the-world trip. Then, they live a more consistent lifestyle through middle retirement. Finally, they increase their spending again in their later years as their healthcare or aged care costs increase.
Your investments, such as your superannuation or self-managed super fund (SMSF), will be your main income in retirement along with the pension (if you qualify). Generally, retirees take fewer risks because they don’t have a 9-5 income to counteract reduced dividend income caused by large dips in the market. However, your investments should have enough growth potential to keep up with inflation, otherwise, your spending power will erode as you grow older.
Once you’ve identified your retirement bucket list, set up a dedicated account or investment to fund it. Even if you’re early in your career, following these steps will keep you disciplined and set you on the path to your dream retirement:
If you want to put a financial plan in place to make your retirement bucket list a reality, we can help. At Poole Advisory, we have a team of experienced financial planners who can assist you in setting realistic retirement lifestyle goals and creating a financial roadmap to achieve them.
Regardless of whether you’re early in your career or a few years from retirement, a financial plan is critical to grow your wealth and protect your financial future. We’ll guide you to make smart decisions for each phase of your working life, pinpoint gaps in your retirement plan, and ensure you have enough money to comfortably tick off every item from your bucket list.
To get started, you can book a complimentary consultation with our Principal Financial Advisor, Anthony Poole, or send us a message via our contact form. We’re based in Bowral in the Southern Highlands, but we also have an office in Sydney and offer online meetings.
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.