In your younger years, you were most likely a lot like many other young Aussies; spending time enjoying your life and possibly feeling as though your retirement years were a long way off, so saving and planning for retirement probably took a bit of a back seat. At some point, you obviously realised that it was time to get serious about planning for your retirement years and put some type of plan in place.
Since more Australians are living longer and living more active lives during retirement, not having a plan in place is not something you want to leave to chance. However, every life situation is different, and every person’s goals are different. In most life plans, those goals are often changing due to matters beyond our control or even different life choices.
So, how do you keep your retirement plan in place when the crossbars keep moving or changing their positions? Many of you may feel nervous as you begin to approach your fifties and your SMSF fund and other retirement savings accounts are not as full as you’d like them to be. More often than not, our lack of savings or plan is largely due to our constantly changing goals.
If this sounds like you, continue reading to learn more about how you can stick to your retirement plan no matter what how much your goal posts keep moving.
Stick to the Plan by Staying Involved in it
When you first sat down with your financial planner or advisor, you provided them with certain details about your retirement goals and plans. They most likely took the time to understand how much money you wanted to retire with and how old you wanted to be when you retire. They also took the time to identify both your long-term and short-term goals in the process.
Take the time to go back and have a good look at your original plan. Have you stuck by this plan? If not, what has changed in your personal situation to stop you? Assess where you are today and how close you are to achieving those goals. Are you on track to reaching your retirement goals? Or, could sticking with your plan use a bit more work?
Wherever you are with your plan today, it’s important that you do what you can to ensure you get back on track and stay there. Especially, if you are in your fifties or if you are approaching your pre-retirement years. Constantly reviewing your plan will help keep your finances in check so you will have a better chance of reaching your retirement goals.
It’s not always enough to have a plan in place and expect it to work for you with minimal effort. Complacency is often what gets us in trouble. Constant evaluation can help keep your goals and plan at the forefront of your mind and will keep you actively involved in your plan so you can do what you can to accommodate that plan by making adjustments and changes along the way.
Additional Retirement Planning Strategies to Consider
If you are approaching your 50s or retirement, you may be starting to panic at the realisation that retirement will inevitably get here and may feel you are not ready for it. Life has changed and possibly had its ups and downs, causing you to go a little off track from your original plan. Here are some possible strategies to consider trying to help accelerate your retirement savings plan in your pre-retirement years:
1. Salary sacrifice.
If you are not already doing this, you may want to talk with your advisor about whether or not it is the right option for you. Making pre-tax contributions doubles the benefits by reducing any taxable income while maximising any super contributions. If you are currently in the highest tax bracket possible, you could receive an upfront tax break of up to 31.5%, and since Super earnings are taxed up to 15%, you could end up building more wealth over time. We recommend talking with your planner or advisor before moving forward with any changes and to make sure you qualify.
This strategy could work well for any couples with a major salary difference because there are some excellent tax benefits available for couples who put their extra super contributions in the account of the lower-paid partner.
3. Self-managed Superannuation.
If you do not have an SMSF account, then now may the time to consider opening one. This account gives you more choice and control for an investment account. Ask your financial advisor about opening an SMSF and what the benefits for you might be.
4. Set up Retirement Income Streams.
If you’ve got an SMSF and other retirement accounts set up and building, you may want to consider putting a retirement plan in place that will provide you with a stream of income to help fund your retirement lifestyle. This will most likely include investment accounts or other residual income opportunities. Your advisor should be able to provide you with some options and suggestions to help point you in the right direction.
5. Make Sure You Have a Wills and Estate Plan in Place.
These are important details that should be put into place for any number of reasons to ensure that you can leave a lasting legacy for your family or to make sure your funds and accounts are properly managed should you become ill.
All of these strategies are great ways to make sure you have a fail-proof retirement plan in place no matter how often your retirement goal posts and plans may change, and when the circumstances in your life change. Before changing your plan or implementing a new one, it is important to talk with your financial advisor on the Sunshine Coast to ensure you stay on the right path and reach your retirement goals and dreams. Don’t let life’s unexpected changes hold you back from your plan and get in touch with one of Ethica’s advisors to discuss your options today.