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How prepared are you for retirement?

Let’s face it, if you are a long term property investor you have been preparing for retirement for a long time, whether you realised it or not. Owning property is a great way to ensure you have a passive income stream from the rent or access to a large lump sum if you sell, whether you are working or not. Naturally, owning multiple properties will simply increase the options you have during retirement.

But there is a question to be asked of people who are not property investors. What are you doing today to prepare for your retirement? Are you relying on Superannuation? Do you invest in shares instead? Whatever it may be, it’s obvious that people have to do something to contribute to their retirement income.

For most people, knowing how to invest for retirement is the largest obstacle, closely followed by knowing where to invest.

Those of us in the financial industry take for granted a lot of the information we take in on a daily basis, building up a knowledge set that makes these types of decisions relatively easy. But for potential clients, people who have little or no knowledge of what we do, there must be some confusion facing them when they realise they need to take action.

Retirement sneaks up on you while you are not looking. Most of us are busy working hard, making a living to eventually reach retirement. What does retirement look like?

Travelling abroad, endless rounds of golf, eating out often, buying a new car and doing all the things you dreamed of doing while you were working are noble ideas. But what does this lifestyle actually cost? How much money do you need to make this dream a reality? How long do you need this money to last?

According to a recent survey by Australian Unity of 1,000 pre-retirees aged 45 to 64, almost 77% of them had not begun formally planning for their retirement. Sadly, 47% of these pre-retirees had no investments apart from their Superannuation and 58% would need to rely on the Age Pension for their retirement.

The Age Pension is not designed to support overseas travel, buying cars and eating in restaurants most nights. It’s designed to be a support for other retirement income.

Clearly, the insights from the Australian Unity study show us that pre-retirees should start planning for retirement now. Perhaps the large percentage of people who have not started planning could be a result of not knowing how to plan. In today’s world, everything is expected immediately, there is no delay in gratification so there is no need to plan for future events because consumable items are available right now. How this attitude will translate into retirement is not known.

Planning is a skill, much like budgeting. Of course, Superannuation is in place to assist people with retirement income, supported by an Age Pension. But how much do you need to live on? It’s a tough issue to deal with when retirement is years away. Perhaps the real question centres more on how long will your income last when you are living the life you want?

Yet, the answer is as plain as it is simple.

Retirement Planning has to start now, for everyone, regardless of where you are in the work/life cycle. Obviously the longer you have available in your working life to save the better off you will be but the key ingredient in all of this is planning. Calculating your income needs to support your preferred lifestyle 30 years out from retirement is a skill that only a Professional can help you with.

Financial Planners support people to achieve their goals. Simple.

A Financial Planner will identify issues that could impact on achieving these goals. Things like teaching budgeting skills, reducing unnecessary debt like credit cards and Home Mortgages and putting together action plans to keep you accountable for the result.

A Planner will charge you a fee, there is no way around it I’m afraid. In life, you pay for skills you don’t have. Clearly, if you don’t have a skill then the obvious answer is to either learn it or pay someone who has it. For example, everybody could learn to build a house and then do it but not everybody wants to, so they hire a builder to do it for them.

Is there any value in retiring with no money simply so you can save on a fee? Or would you rather retire with the lifestyle you want after paying the fee? It’s your choice.

When it is all said and done, a Planner is your best bet to achieving your preferred retirement lifestyle but the responsibility to make it happen firmly rests with you.

Maybe the title of this article should have been worded a little differently.

Perhaps “How committed are you to achieving your retirement dreams?” is more suitable.

A professional Financial Planner is available to talk to you about creating your retirement lifestyle today. Give us a call to make it happen.

We have a dedicated portfolio construction and optimisation service through our ID Super service. Please click here to learn more.

To find our about how the Investors Direct Financial Planning team can help you, contact us at invest@investorsdirect.com.au

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Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
Our mission is to help our clients achieve and maintain their financial freedom.

Members of the IDFG Group include:
  • Nanmon Financial Services Pty Ltd, trading as Investors Direct Financial Group (ABN: 52 097 697 820 ; ACL: 402950)
  • ID Property Advisory Pty Ltd (ABN: 69 141 716 412 ; Real Estate Licence: 071792L)
  • Investors Direct Financial Planning Pty Ltd(ABN: 50 141 139 228 ; AFSL: 385827)
  • Investors Direct Property Management Pty Ltd (ABN: 59 153 184 859 ; Real Estate Licence:073458L)
  • 8 Star Homes Pty Ltd (ABN: 83 135 066 876)
  • Investors Direct Financial Services Pty Ltd ACN 608 410 591
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