Now that the holiday season is over, do you find yourself yearning to stop work altogether? I regularly receive emails and calls from my clients (you know who you are!!) in January and February asking if they are retirement ready!
After the year that was many of us felt exhausted so it makes sense that relaxing on the beach makes us want more of that. Summer holidays are especially retirement-inducing with that wonderful combination of not quite knowing what day it is as they melt together in a haze of swimming, reading, puzzles or card games and perhaps one too many glasses of wine.
If you truly want to retire, then there are practical things you need to consider:
What is the retirement Age in Australia?
It is up to you when you want to retire, however there are two key ages that relate to retirement.
The first one is Age Pension Age and this is based on your date of birth. There is a scale but to keep it simple, if you are born after 1 January 1957 your Age Pension Age is 67 years. To be eligible to receive the Age Pension you must also meet the income and assets test.
The other age to consider is Preservation Age, this relates to when you can access your superannuation. Again this is on a scale but to keep it simple if you were born after 30 June 1964 your preservation age is 60.
How much do you need to live comfortably when you retire?
Well that depends on what your living expenses are and whether you like to do nice things like travel or go out to dinner. The AFSA (The Association of Super Funds of Australia) standard says that a couple require $62,083 per year for a comfortable living. In my experience (in Sydney) it is higher than that. Have a look at your budget or bank transactions as a guide for what you spend each month.
Where will your income come from?
What assets do you own that can pay you an income stream? This may include things like rental properties, share portfolios, business succession plans. It may also include superannuation and the age pension.
In most cases there is no advantage in holding on to debt in retirement but this needs to be reviewed carefully in line with your personal situation.
Will my money last?
The latest research from National Seniors Australia surveyed levels and causes of worry among Australian retirees and found that 53% of older Australians are worried about outliving their savings. Careful and considered planning and tracking should be undertaken to assess how long your money will last. Working longer, even on a part time or casual basis can help your money last.
If you want to track your progress towards a comfortable retirement, we can help. Please get in touch for a complimentary appointment to learn more.
This information contained in this document has been provided as general advice only. The contents of this document have been prepared without taking account of your personal objectives, financial situation or needs. You should, before making any decision regarding any information, strategies or products mentioned in this document, consult with your GPS Wealth Ltd financial adviser to consider whether it is appropriate having regard to your own objectives, financial situation and needs