With all the talk of recession combined with shaky investment markets, are you now considering whether you will have enough to enjoy your lifestyle in retirement?
Although there are things that you cannot do about the markets, the economy or the world, there are many things you can do intentionally to ensure you are Rocking into your Retirement rather than limping.
Add to that the changing landscape of retirement there are many factors that must be considered if you are going to enjoy a long enjoyable retirement.
We are living longer, working longer, healthier for longer and wanting to live a really active lifestyle in retirement.
Combined with Centrelink just about out of reach for most it’s important you are responsible through your 50’s and not let things get out of control.
But before we discuss that, there’s a disclaimer.
This is not advice, I don’t you, you don’t me or might know me a little. I don’t know your personal circumstances and you should not take advice from anyone that doesn’t know you. I only give advice to people I know, clients I work with where I know a lot about them by walking alongside them in their journey. If you are looking for advice then feel free to book a call here to see if we are a fit. Otherwise, seek the advice of financial professional or accountant before implementing advice. That’s only common sense.
So, if you’re in your 50’s it’s likely your kids have left home or close to it or at least not the big financial strain they once were.
You are the peak of your earnings. You have more disposable income, more disposable income as the kids start to move out.
It’s a time where you start upsizing your lifestyle.
You go out more.
You take those overseas holidays you’ve been wanting to do.
You start buying more expensive toys, after all, you deserve it right?
While these can be the some of the most enjoyable years, they are also the years that can make the difference in you Rocking into Retirement rather than limping or just living in survival mode.
This is a period in time that your human capital is declining at a greater rate, that is the ability/years to earn an income.
So, how do you go about making sure that you enjoy yourself, after all, you’ve got to have fun while being financially responsible so you can Rock your way into Retirement and live a great life?
Although it may seem really basic a lot of people miss this step.
Understanding what your basic costs, the minimal level you are happy to live with is the first step.
Although not that exciting, it will give you the foundation for planning for a long and happy retirement. One full of adventure and fun.
Think of it this way. If you were making a really tasty pasta, this would be the pasta. It’s part of the dish that’s substantial, but more exciting and tasty when you add the sauce, herbs, and cheese.
You start with basics, what you need to fund your day to day living expenses, call it your baseline living.
Then you move onto your wants. These are the things that you would like to have, your wishes.
It could be regular travel, helping the grandchildren out by paying their education costs or driving around in a modern car.
This is the sauce of your pasta dish.
It just makes it taste a little bit better.
And then there’s the aspirational stuff. It’s time to think really big here.
If money wasn’t an issue what is it you would love to be doing?
It’s something that would be great but if you couldn’t afford it, it wouldn’t be an issue.
This is the herbs and cheese are added to the dish that makes it amazing.
So, let’s not get ahead of ourselves. In this blog we are going to cover the essentials, helping you work out you baseline lifestyle. We’ll get to the rest in the later posts.
Here’s where you take some action.
- Pull out the last 3mths worth of expenses.
- Categorise them into discretionary spending and non-discretionary spending.
- Out of these expenses work out what will apply when you are in retirement. For most, there are expenses that will disappear in retirement.
This doesn’t have to be exact or perfect as your spending will change over time. This is just the first step in working out this whole retirement funding thing.
What’s considered to a comfortable amount in Australia for a comfortable retirement is $60,843 for a couple and $43,200 for a single.
You can visit the ASFA website here for more information about estimated retirements costs.
Some examples of estimated expenses for a couple are:
- Housing $478.48 pm
- Health $742.64 pm
- Transport $626.72 pm
What I’ve found from over 20 yrs working with pre-retirees and retirees is that everyone is different when it comes to what they require to meet the basics, I’ve got some who live on $40,000 pa and they are very happy while others at the other end of the scale require $150,000 plus a year.
When considering your baseline expenses, it’s not just to put the food on the table. It’s that life that you would be happy with or comfortable in retirement.
If you are struggling with this, use your current lifestyle as an example, use what you earn less taxes and savings and this is going to give you a good idea of what your baseline is.
What might be a necessity for one person will not be a necessity for the other?
The first step is to work out our your number.
It doesn’t need to perfect as it will evolve over time.
Next week we will look at your wants and the week after that your wishes and then we’ll put it all together.
Now, go ROCK this…
So, if you’re a professional earning a good income, business owner or someone planning for retirement and are wanting to create your path to financial freedom with more certainty with less stress and anxiety feel free to book in a 15 min Possibilities call here>>> and we can help you work out what that first step is for you.
I’ll be honest here, we won’t do your pushups for you, but if you are motivated for the right reasons we can save you a lot of time and heartache and save you from the mistakes most people make to fast track your way to wealth.
Ps. We don’t sell you anything on this call. We will help you determine what the next step is for you. However, if you are someone who is looking for a get rich scheme, silver bullet or believe you know everything we are not for you. If you are someone who really wants to achieve financial freedom, committed and wants to work collaboratively then we can help.
Hope that’s been useful.
Know someone that would gain benefit from the information in this email, feel free to forward on.
Make it a great Life!
Challenging the Status Quo!
Glenn Doherty – CFP – Founder & Financial Organiser at Jigsaw Private Wealth
Mob: 0401 253 729