What will your retirement look like? How to plan ahead…

It always pays to be prepared – particularly when your future is involved! Retirement might seem a distant concept at the moment, but it’s never too early to start thinking about your options and putting together a plan.

We’ve put together a list of essentials for your retirement planning process, including the things people quite often don’t think about.

Work out your income now (and make a long-term financial plan)
The financial decisions you make now have the ability to shape your income for the rest of your life. Making a long-term financial plan that considers your current and future income streams will ensure you fall into a comfortable retirement later on down the track.

“If you don’t act now then in the future you’ll have no choice other than to rely on that ever-shrinking government pension, or to remain in the workforce indefinitely” – Simon Pressley, Managing Director at Propertyology.

Don’t live too large
Live with what you need, in a space that suits your lifestyle. Don’t overspend on a ridiculously large house or property just because you have the money to afford it at the time. Making smart home investments now will not only help you save money, but will set you up for a far more comfortable future.

Find ways to grow your retirement fund
It’s important to view your superannuation as little more than money set aside by your employer/s to kick-start to your income post-retirement. For a large majority of Australians, superannuation alone will not come close to being enough to fund the type of lifestyle that people desire. All good retirement strategies work towards acquiring a healthy nest-egg outside of the superannuation vault.

Have a good strategy for debt reduction
While being completely debt free when you start your retirement is desirable, be careful not to do that to the detriment of ending up with insufficient assets to fund your future lifestyle. The goal should be acquiring a defined amount of NET assets (assets less liabilities). In a lot cases, even the most astute investor will have debt when they retire but they’ll also have a well-considered strategy to ensure that investment cash flows are sufficient to meet lifestyle needs as well things like residual investment property loans.
Understand the difference between ‘bad debt’ and ‘good (investment) debt’. During your time in the workforce, adopt a good strategy that accelerates reduction of personal debts (home loan, credit cards, etc) before attacking investment debts (tax deductible).

Seek professional advice before finalising any decisions
With many choices and decisions to make, it pays to seek assistance from skilled professionals. Remember, one can’t know what they don’t know.

The Propertyology team are trained specialists who can help you plan for your future investment. Give us a call to chat about your options today!