This question rates #1: Retirement and Money

Next Stepz financial planners are commonly asked this question: How do I make sure my money lasts as long as I do? Recent research demonstrates that more than 60% of retirees face a situation of running out of money.

Most Australian seniors only have enough savings to last 14 years beyond retirement and may outlive their savings by five years.

Aside from superannuation, there are numerous investment opportunities that you can add to your portfolio to diversify your income. You need to make sure that your money will last for around 20 years or more so it is ideal to find investments that can outpace the inflation rate in Australia.

Common investment strategies ideal for retirees include shares, investment properties, term deposits, and managed funds.

You must think carefully about your investment strategy, because there is always the risk of losing your retirement income. You can manage the risk by diversifying your investments. Always seek professional financial advice from a Next Stepz Investment advisor, accountant or financial planner before you put your money into any investment vehicle.

You may aim to downsize after retirement with plans to travel meaning your expected income should be more than you think.

Plan as early as possible!

Planning on selling the family home and travelling after retirement? Once you know how much income you need to generate, you can start to make a plan. It may seem insane if you are in the prime of your career to think ahead 10-20 years, but it will be worth it. If you plan to retire early in your career you will need to increase your savings.  Financial advisors recommend saving at least 15% of your pre-tax income. This might sound extreme and if this is too high, start at a comfortable number for you and boost this rate by one percentage if possible every few months.

Early planning for retirement is critical because it typically takes many years to accumulate the necessary funds to live comfortably when you no longer enjoy the advantages of a salary. If you begin your investing early in your working life, it will allow funds to accumulate and grow over the subsequent decades, so that you have substantial resources for navigating your retirement years.

Points to consider:

• What’s important to you and your family ?
• Where are you now in your life and what are your most urgent needs?
• Where do you want to be and what would you like to achieve in the future?
• Who else do we need to consider in creating your plan?
  (i.e. spouse, family members  etc.)
• What other issues do we need to consider?

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