7 Key Ingredients For A Comfortable And Worry Free Retirement

Imagine for a moment, rather than mixing all the ingredients to make a cake. You ate the flour, sugar, milk and eggs separately…

It wouldn’t be all that desirable, would it?

But once you mix all the ingredients together in the right order and the right way. You get a very different experience. A tasty cake…

Preparing and planning for your retirement is no different.

Sadly, many focus on individual components. Rather than consider all the components that go into planning and ultimately living a comfortable retirement.

Have you considered which areas you are focusing on?

There are seven ingredients you need to include in your retirement planning. If you want to experience a great lifestyle in retirement with more confidence.

Do you have a handle on these seven ingredients?

#1 Vision

Could you imagine if you went on a holiday with no planning? No idea where you were heading and the experiences you want to have?

You just hopped onto a plane…

It’s likely it would be an absolute disaster.

Planning your retirement is no different.

Yet, it’s well known that people spend more time planning their two week holiday. Than they do on their 30 plus year retirement…

It’s important to have an understanding of where you are heading and how you are going to get there.

Even if it’s your best guess…

Are you going to take off in a caravan for 3 months of the year?

What overseas adventures are on your bucket list?

What hobbies and interests are you going to spend time on?

Do you want to help the kids out financially?

When would you want to make work optional?

There’s one important fact we know…

You can earn money, but you can’t buy more time.

Life’s not a rehearsal…

If you don’t prioritise what’s important in life. It’s very easy to let the urgency of life take over and distract you.

Creating a good vision or bucket list helps you know what a good life looks like. Whether that’s the same lifestyle you have now or a better lifestyle.

It helps you side step the bad choices that could disrupt your good life.

A good vision helps you set goals. It helps you determine if you are on track or off track. Allowing you to take measured action at the right time.

Having a good vision will help fuel the right behaviours to live a good life.

In our fast-paced world, it’s easy to drift. If you let it drift it will be harder and costlier to get back on track.

#2 Plan

Imagine you have all the ingredients to make your cake. But rather than following a recipe you had nothing to follow.

No guide on how much flour or what flour to use…

Is it two eggs or three eggs?

How much butter?

Which size cake tin do you use?

How long do you cook the cake and at what temperature?

While very few would be able to accomplish baking a good cake without a recipe. The majority of us would fail dismally…

If your goal is to arrive at retirement with the confidence and peace of mind. Financially prepared to embark on your retirement journey.

A well thought out and considered plan or roadmap is a key ingredient in your retirement planning.

A well thought out plan gives you the confidence you can experience all the things you’ve been dreaming of in retirement.

Without fear of running out of money.

Your plan will guide you and provide the framework for all your financial decisions. Helping you to keep out the wrong ingredients that could derail your retirement lifestyle…

A good financial plan is like a blueprint for achieving your dream retirement lifestyle. It will outline everything you need to do financially to achieve a comfortable lifestyle in retirement.

It will provide clarity.

Keeping you away from the financial marketers grabbing your attention. With painful news rather than something positive.

The focus of the financial marketers is on recessions, market collapses and wars to name a few.

A good solid retirement plan will account for these market and world events. Allowing you to sail through the roughest of seas with calmness and ease.

Do you have a well thought out documented retirement plan?

Does your plan account for unforeseen events?

If you don’t, every day you don’t have a plan is less money you’ll have in retirement.

The less money you have in retirement. The less you’ll be able to experience in your retirement years.

Get your PDF copy of ENOUGH? here…

#3 Timeline

Run your own race, don’t worry about what your friends and other people around you are doing.

You don’t need to be like the Joneses of the world…

Time is your most valuable gift. You can make more money but you can’t make more time.

When putting your retirement plan together it’s important to know how long you are planning for.

While it would be nice to be handed an envelope with your end date. That’s not the reality. Therefore, you have to make some educated guesses on how long your money needs to last.

If you’re healthy and there’s been no major health issues in your family. Then you have a good chance of living well into your 80’s and 90’s.

It is well known today with the advancement of the medical industry that one in a couple has a high chance of living well into their 90’s.

When you look at how long you need to plan for. By looking at your family history and your own health will provide some insights.

While you probably don’t want to be the richest person in the cemetery. Wouldn’t you like to know how much money you can spend safely in retirement.

Enough to get you through and experience everything you wanted to. Without running out of money.

How long are you planning on making your money last in retirement?

Is there a risk you could be underestimating this which may leave you short in retirement?

#4 Spending

There are limited things you can do with money. Spend, save, invest or give it away but you can’t take it with you.

Traditionally when we think of money, our attention turns to budgets. This comes with many negative connotations.

Budgets by their very nature are restrictive.

We’d prefer to talk in terms of spending plans.

Spending plans free you from all the stress and anxiety related to money.

Knowing your spending plans will give you answers to the most important questions:

#1 Have I saved ENOUGH?

#2 Will I run out of money in retirement?

#3 When can I retire?

#4 How much can I spend in retirement?

If you don’t know how much you’re going to spend. At least have a good guess. You have no way of knowing whether you’re going to be okay. Even worse, whether you’re going to run out of money in retirement.

It’s no fun retiring only to realise you’re not going to have enough. Have to cut back on experiences. All the while lamenting that you should have done something 5 or 10 years ago…

Do you know if you can spend more in your active years in retirement?

How much income will you be able to spend in retirement?

#5 Net Worth

Having a high net worth does not mean you will have a worry free retirement.

I know a lot of people with a high Net Worth and they all still worry about money in retirement…

Understanding your Net Worth is an important ingredient to understand if you can reduce work or ultimately when you can finish work.

Calculating your Net Worth can be confusing for many people. Many include their family home in the calculation. That’s great if you’re going to downsize, but it’s not something that has happened yet.

Retirement is all about cashflow, not your Net Worth. Sure, your Net Worth is important but it’s the income you generate from your Net Worth that will drive your retirement lifestyle.

When you work through your Net Worth be sure to list your liquid assets. Things like super, cash in the bank, investment properties and other investments. Deduct any debts you have and that will be your Net Worth (excluding the home and personal assets).

The importance of this number and more importantly getting it right from the start can’t be underestimated.

Your Net Worth number will be the financial resources you have available to fund your retirement income.

Do you know what your Net Worth?

Will it be ENOUGH to fund a long and adventurous retirement?

#6 Forecast

David Booth, one of the founders of Dimensional funds management once said forecasting is when you have a high degree of confidence in an outcome based on a well proven model.

He’s said a forecast is different from a wish or a worry.

For instance, the weather forecast for a few days out is a lot better than what you’ll read about investing on google…

The weather forecast is pretty darn accurate. Forecast would be a pretty accurate use of the word.

But someone who is making a forecast on where the ASX All Ordinaries will be on a specific date. Or when inflation numbers will peak. Or which shares will rise the most over the next year.

So when people tell you something will be at a certain level at some point in time. That’s a wish, not a forecast.

On the opposite side of the coin, when people are forecasting something will go down at a certain time.

That’s a worry…

Do you really want to invest your retirement nest egg based on someone’s hunch or a wish?

There are investing rules that have stood the test of time. Which are not based on a hunch or a wish.

The good news…

You can have a good investment experience by thinking long term and having a diversified portfolio customised to your retirement planning needs.

When planning retirement for clients, we hope for the best and plan for the worst. It’s the blindspots that trip most people up.

It’s great to know what’s happened in the past. The future might be similar but we can’t assume it’ll be the same.

Once you have a vision, a plan, a timeline, know your spending and your Net Worth. You have all the ingredients to confidently forecast your financial future.

The future will be different than the past. Your forecast will give you a starting point.

As you embark on your retirement journey, new information will come to hand. Your plan and your forecast act as your financial positioning system.

Providing a framework to make course corrections. Giving you the confidence to make spending decisions in your retirement years.

Are you making investment decisions based on hunches or wishes?

Do you have any idea how your financial future might pan out?

You might want to also watch “Is $2 million enough to retire comfortably in Australia?

#7 Mindset

It’s great to have a well thought out plan, but without the right mindset, chances are it’ll fall apart when you least expect it.

Recently, I’ve signed up for tennis coaching. While I would consider myself an okay tennis player. I realised I didn’t know what I didn’t know…

In one lesson, I was discussing with my coach my serving. Telling my coach I wanted to be more consistent. To stop making double faults at crucial points in the set.

His response, it’s all in your head. In other words there was nothing wrong with my serving action, just my mindset at the time.

But when it comes to planning your retirement, mindset is a critical ingredient that many fall prey to.

For most of your working life the focus is on accumulation. Adding regularly to your super. Maximising your investment return.

You have your regular income to fall back on when share markets fall. It adds a layer of security behind you.

As you head into and transition into retirement, that all changes…

It’s something new and unfamiliar at the same time. It can be a stressful transition. While you’ve experienced the accumulation side of the equation.

You haven’t experienced decumulation…it’s different, new and filled with uncertainty.

It’s all now about income, safety margins and you are exposed. You don’t have your employment income to rely on.

You have to set up right with the right framework to make confident financial decisions along your retirement journey.

Ask yourself, what is it that makes business people successful and sportspeople reach the top of their game?

They all have one thing in common…

Coaches to help provide clarity and insights so they remain focused on what’s going to make them successful.

Retirement is no different…

Who do you have in your corner that will guide you? Keep you on track? Someone who will help you identify your blind spots before they are known…so you are prepared.

Do you have someone you can turn to with a proven framework for making confident financial decisions when the future is uncertain?

Bonus #8 Implementation

The icing on the cake…

Without implementation, your retirement plan does not come to light.

Many wait for the perfect time…

I have some bad news for you…

There is no perfect time…

If anything, the most common comment we receive from people we work with, is “we should have done this five years ago”.

One of the biggest mistakes we see people make is waiting too or looking for the perfect time to implement.

In fact, in all my years helping people with their retirement planning. There’s one phrase I’ve never heard from any client ever: “I really wish I would have waited longer to do this.”

The perfect time to get your retirement plan in order and implement is now…

Make Smart Decisions For Your Retirement Today…

Don’t let the simple passing of time be the reason you can’t experience more in retirement.

A well thought out retirement plan will help you avoid costly retirement mistakes. While helping you to prepare for your retirement years.

All the critical steps listed above are key to achieving confidence when the future is uncertain. Actioned in the right order it will give you peace of mind.

When making financial decisions for your retirement you can talk to Glenn at Jigsaw Private Wealth. We offer a complimentary Retirement Clarity Call which you book on the calendar below or by clicking here.

Glenn Doherty – CFP – Financial Planner | Retirement Planning Made Simple for aspiring grey nomads and avid travellers within 7 years of retirement 

We work with people in Adelaide and around Australia via virtual meetings!

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