Will You Ever Retire?

Will You Ever Be Able to Retire?

You’re at a point in your life where you can see your golden years of retirement approaching, but will those years truly be golden? A comfortable retirement requires a mix of financial safeguards that may include State pension or benefits, pensions from employers past and present, personal savings and investments.

Will You Ever Be Able to Retire?

Will You Ever Be Able to Retire?

Consider the following when drafting your retirement plan.

When should you begin planning for retirement? Most financial experts recommend planning and saving for retirement as early as 20. Most young people, however, tend to be in a state of denial, waiting for the approach of middle age to consider the golden years. In fact, denying the value of savings and compounded interest from ages 20 through 40 could cost the average saver as much as six figures in retirement income.

What will your ideal life in retirement be like? Will you want to maintain your current standard of living or will you choose a simpler, more downsized retirement lifestyle? Will you want to fully retire or will you continue working in a part-time vocation? If fully retiring, make a list of possible leisure time activities, such as playing golf, painting or traveling in an RV. If you’ve decided to get a part-time job in retirement, assess your likelihood of employment. Make a list of your skills that could easily transfer to a part-time job. Be honest with yourself.

How much money will you need to retire? Take an inventory of how much income you’ll need for retirement to maintain your current standard of living. Some recommend estimating your current yearly expenses by calculating routine costs that include a year’s worth of bank records and credit card receipts. Others recommend writing down each retirement goal on index cards. On each card, include what it will cost to accomplish the specific retirement goal and how much you’ll need to save per month for that goal.

Factor in your current employer’s traditional pension plan, and/or self-invested retirement plan. In your assessment process, include any independent retirement investment plan that’s either self-directed or directed by a financial planner. When taking inventory, take into account unforeseen life-changing events such as unemployment, supporting children or aging parents, divorce and/or marriage, disability or coping with a death in the family. Also factor in any cumulative impact of inflation on your retirement cost of living.

When should you retire? Estimate how much in State benefits you’ll need to receive to cover most or all of your retirement needs, assuming that your current income level will continue.  Will you be able to afford early retirement at 65, claiming lower benefits, or will it be worth retiring later at 70 for greater benefit amounts?

What is the right retirement investment plan? Typical low risk and liquid retirement investment plans include savings accounts, money market mutual funds, certificates of deposit and property or shares. You can set up your own private super fund and manage it yourself, but only under strict rules regulated by the Australian Taxation Office (ATO).

If you’re running an SMSF, you will typically need:

  • A large amount of money in the fund to make set up and yearly running costs worthwhile – usually at least $200,000
  • To budget for ongoing expenses such as professional accounting, tax, audit, legal and financial advice
  • Plenty of time to manage the fund
  • Financial experience and skills so you are more likely to make sound investment decisions
  • Separate life insurance, including income protection and total and permanent disability cover.


How do you find the right financial adviser for your retirement? Go to the ASIC MoneySmart website.  Use its “Find a Planner” database to retrieve a list of financial advisers near you. MoneySmart website is run by the Australian Securities and Investments Commission (ASIC) to help people make smart choices about their personal finances.

Reducing debt is an important part of any retirement plan. Consider getting advice from a financial advisor. Because there are many such advisors around, it is best to be as selective as possible.

However, you should consider getting financial advice before you make major financial decisions.