It’s never too early to start planning!
When you start thinking about when to retire, a lot of questions come into play: Do you have enough superannuation and or savings for the kind of life you want to live? How long will it last? Will you qualify for an Age Pension? What senior’s offsets or benefits am I entitled to? Many prospective retirees who research their retirement options come to the stark realisation that in order to fund their retirement at the same standard of living they currently enjoy they must either:
1. Retire later in life, working longer to make further contributions to your retirement funds.
2. You save harder, combining a more disciplined approach, placing excess funds into a more growth-oriented savings account or fund.
3. You spend less, review current expenditure, and perhaps re-evaluate your needs.
The Australian financial system is so complex with so many variables to factor in when researching retirement options that it is highly specific to the individual; advice should be sought to ensure any retiree makes the most of the system to optimise their funds in retirement. If this is not done, the risk that retirement funds dry up prematurely is very real.
It is also important to remember that while financial consideration plays a vital role in timing your retirement, your emotional readiness should also hold significant weight. There are many factors that should be considered when deciding if you are emotionally ready to retire, such as how you plan to keep busy? What you hope to achieve in the next stage of your life, what your support network looks like. Once you have a sense of how you want to live throughout retirement it is time to analyse and compare your financial situation and most importantly seek advice.