Do you have enough to retire on? How much even is ‘enough’ to retire on? Will your retirement years be free of financial worries, or will you struggle to make ends meet? How can you ensure your ‘nest egg’ will last the distance?
Picture this: you’ve just retired from your last ever day of work, picked up your last paycheque, and suddenly the realisation hits you – all you have to rely on to fund your entire retirement, travel plans, emergencies and that new boat you want is your superannuation and savings. What if the money runs out too soon? How do you know if it’s enough to do the things you’ve been looking forward to, as well as buying the groceries and paying the bills? It’s hardly surprising that many retirees are more than a little nervous about their financial security when faced with this situation.
It can be really hard to work out how much you’ll need to live on for your entire retirement, but to maintain the same standard of living you have had, you’ll probably need about 60 – 80 per cent of the annual income you earned before retirement.
When determining how much you need, you also have to consider:
Interest bearing and capital guaranteed investments tend to be the most secure investments, such as cash or savings accounts, government bonds, savings bonds, and fixed-term trusts.
These types of conservative investments, despite being secure, often produce a return of roughly 2-6%, which may not be enough income to satisfy your needs when you invest your lump sum in them.
Higher, long-term returns and greater capital growth can be attained from investments such as shares or property, and shouldn’t be ignored. For producing regular income for day to day expenses, you can invest in tax-effective account-based pensions, unit trusts, and bank, building society or credit union accounts.
If you’ve done the maths and you don’t think you will be able to finance the lifestyle you’d like, and if continuing full-time employment isn’t an option, you’ll need to make your money last longer. How can you do this? Here are a few options:
If you’ve just retired, or you’re approaching retirement, one of the best decisions you can make is to discuss your plans with a qualified financial adviser, who can help you make sure your retirement dreams become reality. Here at Wealtheon, we can help you become more aware of the importance of creating a secure financial future for your retirement.
For further information, contact Kris from Wealtheon Pty Ltd, authorised representative of Lifespan Financial Planning Pty Ltd AFSL 229892, on 1800 577 336 or email firstname.lastname@example.org.
Have some questions? Want to know how it applies to you? Want a review of your personal situation? Click here to book a Free 15 Minute Discovery Session, give us a call on 1800 577 336, or email us at email@example.com.
Information on this site may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.