Retirement is a significant milestone that requires thoughtful planning to ensure a smooth transition. Below are ten essential steps that every professional should take as they approach this next phase in life.
- Assess Your Financial Situation – Begin by reviewing your current savings, investments, and superannuation contributions. Take stock of assets like property or valuables that may contribute to your retirement. Understanding your financial picture will help identify any gaps, enabling you to make the necessary adjustments. A conversation with a financial advisor can provide clarity and help create a plan for growing your savings.
- Evaluate Pension and Superannuation Options – Your retirement fund is likely to be your primary income source in retirement. Review your superannuation or pension plans to ensure contributions are on track with your goals. Explore options like income streams or annuities, and be sure to assess your eligibility for government support, such as the Age Pension, to fill any potential income gaps.
- Plan Your Retirement Budget – Estimate both essential living expenses and discretionary spending, such as travel or hobbies. Don’t forget to factor in rising healthcare costs and inflation. Creating a well-balanced budget will ensure that your savings last throughout your retirement. Revisiting your budget regularly will help keep you on track.
- Review Health Insurance and Estate Planning – Take a close look at your health insurance coverage to ensure it suits your future needs, considering private options if necessary. It’s also important to update your will, power of attorney, and other estate documents to ensure your wishes are clearly documented. Consulting with an estate planning professional will help secure your assets for future generations.
- Consider a Transition Plan – Easing into retirement gradually can make the shift smoother. Reducing your work hours or taking on consulting roles can help maintain a sense of purpose. Consider how you’ll spend your time, whether through hobbies, volunteering, or learning opportunities, to stay mentally and physically active in retirement.
- Downsizer – explain what downsizer is and outline this strategy works well for people who have no debt or significant equity in their primary place of residence looking to downsize into smaller properties for lifestyle purposes and inject surplus into superannuation as a Downsizer contribution. Do some research on this and may want to include the same.
- Optimise Contribution Strategies leading towards retirement – strategies to consider include, Salary Sacrifice, Bringing forward any Unused Concessional Contributions, arranging Non-Concessional Contributions. Do some research across these and you may want to include the same.
- Tax – moving into retirement doesn’t mean you will not have tax implications. Consider your existing investments and identify if these will continue to have tax obligations into retirement, or consider how to optimise ownership structure to help offset or reduce future tax into retirement.
- Debt Management – review current lending position and determine if any debt will be retained into retirement, or whether you will be expunging remaining debt and how this will be arranged.
- Consult a Financial Advisor – Before making any major decisions, it is prudent to consult a qualified financial advisor. An advisor can provide personalised advice based on your specific circumstances and goals, ensuring your strategy is sound and aligned with your retirement aspirations.
Ready to Plan for a Secured Retirement? Book a free no obligation 15-minute conversation The Hopkins Group – Financial Planning with one of our financial advisors to discuss your retirement goals and ensure you’re on the right path.
