How uncertainty can be the silver lining for a comfortable retirement

Back nearly 12 years ago we welcomed into the world our first child. He was not waiting for anyone…just wanted to enter the world in a hurry.

It was an anxious time…not knowing what the future would hold.

Going from a pretty carefree lifestyle to one dedicated to bringing up a little human being.

At the time, like many, it was an overwhelming and a monumental change in the way we lived.

Tired all the time…sleepless nights…grumpy and at times frustrated by not knowing what to do.

I still remember the nights with our first child on my shoulder. Sitting on the lounge exhausted trying to get him to sleep.

I’m not sure who went off first…

Like most parents you adapt…at times you just make do…even though it might be against everyone’s advice.

Then 3 years later we welcomed our second child into the world…

It seemed a lot easier while chaotic at the same time…

We’d learnt a few things from the first time.

Maybe we were a little more relaxed. Maybe a little more experienced but we sort of had an idea of what to do the second time around.

Still full of uncertainty at every turn, at times we thought we’d never make it but we did.

Right now, if you’re on the cusp of retirement…anywhere within 7 years.

You’re probably feeling a little anxious…

Probably worried with everything going on in the world right now that you’ll have enough money for retirement.

You’ve got share markets diving…inflation fears…interest rates increasing and let’s not forget about the war in Ukraine dragging on.

And to make it worse, the media sees blood and their making hay while the sun shines…

There’s a lot going on. It can be difficult to focus on the future when so much is happening around you.

Times like these allow you to prepare well for retirement…

You only get to retire once, there’s no second chance and there’s no practice run…

We’ve walked this path many times over. Through many world disasters and market meltdowns.

Here’s how you take uncertainty by the scruff of the neck and strengthen your retirement planning. So you can enjoy a comfortable retirement no matter what’s on in the world with unwavering confidence.

How much risk can you handle?

If you’re feeling a little nervous. Even panicking with the recent falls in share markets.

Or for that matter, whenever share markets go down.

It’s normal…

While it may feel like the world is falling around you, it can help you prepare better for the future.

You see, if you are feeling stressed now. While you have a regular income coming through from your job.

It’s going to be even worse when you are retired with no income coming from employment.

You’ve got no fallback position…

It’s time you reviewed the level of risk you are taking with your super and make plans to adjust prior to retirement.

Sure, making an extra 1% a year may sound great. But at what cost?

If you could live the lifestyle you want in retirement and take less risk. Would you be comfortable with that?

Do you know how much risk you need to take with your investments?

Are you over optimistic about your long term returns?

Just the other day I was having a conversation with a couple who were looking to retire in 3 years time.

When we were discussing the income they needed. They also told me they were working on a conservative investment return.

When they told me that conservative return, I nearly fell off my chair, thinking…that’s far from conservative.

It’s a mistake many make leading into retirement. Thinking the returns they have received in the past will be the same in the future.

Not only that, if you work on overzealous assumptions, you could be in for a rude shock in retirement.

It’s not something you can afford to get wrong…but yet many do and pay for it later on.

With investment markets generating strong returns over the last 10 years. It’s prudent to expect this will not continue.

While you need to use some sort of investment return assumption to calculate your numbers. It’s best to err on the conservative side.

You can’t control or predict what investment markets are going to do. You can control how much risk you take.

Are you being optimistic with your return assumptions but don’t know it?

What investment return do you need to make to make your money last through retirement?

Testing your retirement numbers…

While you won’t be able to predict what’s going to happen, you do need to have a plan to guide you.

It’s likely your plan won’t go according to plan due to an uncertain future.

That uncertainty can hold you back…

You can feel empowered by uncertainty instead of beaten down by it.

You only need to think about all the unexpected turns your life has taken and the possibilities those turns opened up.

While you couldn’t have predicted the outcomes of those decisions you made. You intuitively knew how to gauge your feelings about the risks and opportunities being presented to you.

Testing your retirement numbers is no different…

Knowing how your finances may pan out will put you in a better position to plan for what you will do and when.

Perhaps you can take an extra overseas or two more than you had planned…

Retire earlier than you thought…

Enjoy a few more luxuries…

Take on less investment risk than you have too…

This step is critical in helping you live the best lifestyle you can with the money you have.

In times of uncertainty. Testing your retirement numbers will put you in an even better position to live the life you want.

With more confidence and less stress even with all the chaos around you.

Have you tested your retirement numbers against different assumptions?

Do you know how long your money will last in retirement?

Get your PDF copy of ENOUGH? here…

Are your safety margins dialed in?

When investment markets fall and you will experience many in your retirement journey.

It’s not a good feeling watching your super decline in value after many years of building it up.

It’s a double whammy when you start to draw a regular income from your super in retirement.

Now’s a great time to dial in your safety margins. The amount of money you need to comfortably get through a market downturn without having to sell.

Don’t underestimate this step…

But you need to know what your future cashflow is going to look like. When and how much you will need to take from your retirement honey pot.

It’s not uncommon for our clients to push back on the amount of safety margin we build into retirement plans. After all cash rates have been pretty poor…

In times of share market falls, they are thankful…

You can’t leave this step till you retire. You must prepare years in advance.

Murphy’s law says, the time you retire will be when you experience a share market fall…

Do you know how much you need in reserve to manage through a share market downturn?

Do you have an idea of what your cashflow looks like over the next 5-10 years?

Embrace uncertainty with confidence

Uncertainty helps you peel back the blinders and opens your eyes to what’s really going on.

Over the past few years, many have been chasing rainbows.

Times like these allow you to see clearly what you need to be planning for…

So the next time share markets fall or other economic challenges arise, you are better equipped for making sound financial decisions.

Uncertainty highlights what we need to be planning for…

Have you got a sound roadmap for retirement that will give you the direction you need?

One that will help you move forward with unwavering confidence…

If not, let’s talk…

Book your complimentary Retirement Clarity Call on my calendar below.

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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An opportunity to talk through some of your challenges and questions you have around your retirement.

Achieve some clarity and maybe a roadmap on how you can achieve a comfortable retirement.

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Advice Disclaimer: Any reference in this publication to the provision of advice refers to advice of a generic nature, and should not be taken as product or investment recommendations. Before any action is taken based on the information provided, independent financial advice from a licensed financial adviser should be sought. Financial Freedom Project Pty Ltd ATF GA & DC Doherty Family Trust Trading as Jigsaw Private Wealth is a Corporate Authorised Representative of Exelsuper Advice Pty Ltd. The information contained in this publication is of a factual nature only and is not intended to constitute financial product advice. Information is current as at date of publication. This is an online information blog. It does not imply an offering of securities.

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