One of the most common questions asked in Australia is by people approaching their retirement years. The question most often asked is on the topic of retirement planning and how to best prepare.
If you have ever wondered to yourself if you are ready for retirement, then don’t worry as recent studies have shown that you are not alone.
Recent studies conducted by certified financial professionals, have shown that most Aussies approaching retirement can avoid common pitfalls and mistakes, by planning ahead for their retirement years.
There is no reason to be fearful and stress over the coming years, as smart financials decisions made today as a part of retirement planning will ensure you live comfortably in the future. Not planning for your future today is one of the biggest mistakes which you can make, so be sure to read the following tips and learn which smart adjustments you can make.
Planning with outdated assumptions
The vast majority of Australians approaching retirement age have a solid understanding of their assets, the amount of money they will need during retirement and how long that money will last. Where most people fail is where they neglect to check their numbers against different market conditions.
When planning for your future retirement, a good first step is to closely examine you expected annual rate of return and to compare this against the inflation rate and CPI. If these macroeconomic factors were to change in the future, you could end up finding yourself in a worse off position.
By being aware of these factors you can decide today if you are prepared for your future retirement or if you perhaps need to consult a retirement planning professional.
Retiring too early
One of the biggest mistakes which new retires make is retiring too early, when they could in fact be continuing to work for a few additional years. Working for even a few more years beyond your planned retirement age can pay off surprisingly well.
By working even a few days each week in a part time capacity, this will help to ensure that you can enjoy a comfortable retirement and provide you with additional funds which can be used to diversity your investments.
Studies have shown that for every extra year which you stay in the workforce, is another year which you are not supporting yourself through drawing down on your superannuation.
Paying for your kid’s university before your retirement
Paying for your child’s university fees is a wonderful thing which as a parent you can do, but it can also result in the setback of your future retirement plans. Retirement planning should never jeopardise your own future by using large amounts of your personal funds, which would be better off paid towards your superannuation.
In Australia, there are many different forms of government assistance which your child can take advantage of, when it comes to paying for higher education fees. When planning for your future retirement you should always focus on building your wealth and protecting your nest egg, thus ensuring you live a comfortable life during your retirement years.
Remember that it’s never too late to begin planning for your retirement and ensuring that you avoid making some of the biggest mistakes when it comes to your retirement plans.
