Retirement, the event that each and every person works towards during their working life. We often dream about the things we are going to do when we retire. Those dreamy holidays, sleep-ins and doing the things we love to do or haven’t had the chance to do due to work commitments. But the question that is begging to be asked is……”Are you prepared for retirement?”
What is retirement planning?
Lets define retirement planning. Retirement planning is exactly that, planning for your retirement. Putting together retirement planning ideas will help you make those key decisions that require consideration when looking ahead to the lifestyle you hope to have when you have finished working. Retirement planning is not the most exciting topic, but it certainly is an important one for your future. It is important to note here that there is no best retirement planning age, in fact it is never too late or early to start putting a plan in place for your retirement.
What age can I retire?
There is generally no hard and fast rule of when you must retire. Some professions may stipulate a retirement age due to age related concerns. These requirements differ throughout the world. However, for the majority it is a personal decision and can only be made by you. Sometimes even the best laid plan may not come to fruition such as in the circumstances when illness, job loss and difficulty finding a job occur.
Considering this, the age of retirement is usually governed by four main factors.
- Job loss/redundancy
- Difficulty finding employment, and/or
Can I afford to retire?
Great question! Can you? The first of the main considerations when to retire is indeed whether or not you can afford to. How long will you live, how much money will you need each year? These are also questions that need to be addressed. We discussed above the retirement age, here is Australia there are two things that usually determine when people look at retiring. The first one is the age you can access your superannuation, and the second is when you can access the aged pension. With all these things in play that will determine when we retire can you now see the importance of starting to plan or at least think about retirement planning ideas?
Retirement planning is so important and with a good plan in place you will have a contingency to help get through an unexpected forced retirement through illness, job loss and unemployment. As Forrest Gump once said, “Life is like a box of chocolates. You never know what you are going to get.” So lets gets the retirement planning ideas happening!
The information I have come up with has been sourced from mainly Australian websites. I have worked on the information to try and present it so it can be used universally as a guide for all my audience across the world. However in saying this, it is important for you to understand, that this is a guide only. You will need to do further research as to what is relevant for your personal circumstances in your own country and I would recommend consulting with an industry professional, such as your taxation department or financial planner to make sure everything about your plan is in tip top shape and your looking good for retirement.
Retirement Planning Checklist
15-20 years before retirement
You need to start thinking about what you want out of retirement. What does retirement look like for you? Travel, hobbies and other activities you would like to do.
Where are you going to live? Where would you like to retire to?
Are there any new skills you need to learn to help you in retirement? You might want to start that business or focus on that hobby.
Consider your family circumstances. Do you have any dependants?
Gather financial advice about your plans and goals for your retirement. Seek professional advice if required.
Ensure you have a current will, choose an executor and organise an enduring power of attorney and any advanced health directive.
5-10 years before retirement
Revise your financial plans. Look at what you have so far and what the projected income will be. Look at how you can close any gaps between what you have and what you will need.
Start to think about a possible retirement age.
Look at when you will be eligible to access any government assistance such as pension or as with in Australia superannuation.
Consider any tax concerns.
Research what government assistance is available to you and what are the stipulations for accessing that.
Discuss your retirement plans with your partner.
Start to think of things you could do to supplement your retirement income. Do you have any skills that can earn you some extra money? Do these need updating? Do you need to learn new skills.
Consider where you want to live. Start to do some research, especially if you plan on moving to another town, state/territory or even country.
Update you will if needed. This will be required if you have a change in family circumstances.
1-2 years before retirement
Revise your financial plans. At this stage you will have a better idea of what your plan for retirement will be. Are you on track with your finances?
Can you afford to retire as planned or will you need to work for longer?
Now is a good time to start discussing your retirement plans with your employer.
What are you planning to do in retirement? How are you going to keep your mind and body active? Perhaps you would like to volunteer. Perhaps start doing yoga or even zumba. Retirement is a great time to have extra time to learn new skills or start a new hobby. Other ways to keep active an alert include study, work, start a business or learn how to use computers and master the internet.
Update any skills needed for retirement.
Don’t forget to stay social. Look at ways to meet new friends and contacts.
Can you decrease your employment workload the few years before you retire? Are you able to use your retirement savings to supplement your income? What are the implications? Recommend getting financial advice regarding this.
Think about whether you have copious amounts of holiday or long service leave that needs to be used up before you retire? Organise when would be best to take this.
Getting organised. More serious thought about where you will live once you retire. Does your house need repairs/maintenance or renovation to support you in retirement.
Does your car need replacing? Do you need to downsize your life for retirement? If your going on a holiday, start doing some research to see when is the most economical time to travel.
6 months before retirement
Are your finances in order? Are there any changes that need to be made? Is the retirement plan date still suitable for you and your family?
Review your will, prepare or revise as required, with executor and enduring power of attorney in place. It is recommended that this be done every 3-5 years.
Review any life insurance. Have a thorough health check-up and review your health insurance.
Start getting involved in new activities before retirement date. it is just around the corner so kick up your heels.
3 months before retirement
Well retirement is just around the corner now. It’s so close you can smell it!
Check that your finances are all in order.
Have you applied for any government support your entitled to?
And attend to anything mentioned previously that you have not done as yet.
CELEBRATE!! You have earned it! CONGRATULATIONS!!
Why not have a retirement party? What a great way to kick off the next stage of your life.
With the information at hand. It has become clear that starting to put together some retirement planning ideas is definitely an important thing to start putting in place. There are key elements that determine when people are able to look at retiring. The number one key factor being affordability. Depending on where you live in the world will depend how you are expected to fund your retirement or whether you have access to a pension. These two elements determine, in Australia when the majority of people look to retire. There can also be situations that people are forced into retirement for reasons such as health issues, unemployment or job losses and redundancies. With these considerations, there is no time like the present to get planning so your transition into retirement is as seamless as possible and rather than being a stressful thought can be something to work towards and enjoy.
I hope you have found this article informative. Please feel free to leave any questions or comments below in the comments section.
Until next time.