retirement planning

Retirement Planning is Hard: Achieve peace of mind by taking one action

The million dollar question everyone’s trying to answer, “How much is Enough?”.

On the surface this may look like a simple question to answer with a simple mathematical equation.

And yes it can, but it could leave you reeling with regret in your later years of retirement.

However, I think the deeper question is, “How do I live the best life possible in retirement, packed with experiences and memories without worrying about running out of money?”.

In terms of whether you’ll have enough, there’s wider issues and considerations which need to be taken into account which could significantly impact the answer to this important question:

  • How long you might live (longevity)?, many underestimate how long they might live, for many retirement is a 20-30 year timeframe
  • The increasing cost of living (inflation)
  • Investment returns and investment risk
  • Your financial resources (super, investments and ability to derive an income from work)
  • Change in spending through your go-go, go-slow and no-go years
  • If you can access age pension entitlements (over 60% of people will gain access at some point in their retirement)
  • Whether you downsize
  • Do you reverse mortgage later on in life?
  • Do you plan on leaving an inheritance or not?
  • Will you receive an inheritance?
  • How much income can you derive without exhausting your money before you die?
  • How long do you work for?

All which will impact your final “Enough” number.

As you can see, it’s a complex equation with many moving parts, there’s no easy answer.

It’s why so many struggle on their own to determine what “Enough” is for them. There’s no simple answer.

Why Retirement Planning Is Hard…

It’s the first time in your life you’re faced with making important decisions around extracting the income you need in retirement without running out. It’s a difficult task to balance drawing an income while ensuring you won’t run out of money.

If you take one look at your working life, you’re employed, receive a regular income and a certain amount automatically goes into super on your behalf.

For most, it’s a relatively passive approach. If you don’t specify, your super fund will invest in an option on your behalf. While some may make a decision to manage it themselves.

Some may make the decision to invest in other investments, like real estate to increase their assets over time.

The accumulation phase through your working life has served most well.

As you approach retirement, you’re now charged with figuring out a way to extract a level of income to fund your retirement lifestyle without depleting your assets too quickly.

Retirement planning has it’s own set of rules and challenges which makes it so hard to navigate alone.

You’re exposed to decisions you’ve never had to make in your working life.

But, when it comes to retirement, it’s a completely different kettle of fish. It has it’s own set of rules. You’re exposed to decisions you’ve never had to make in your working life.

All of a sudden you’ve got to sit up and take notice. Sadly, you don’t have a crystal ball to assist in managing a future full of uncertainty and unpredictability.

It’s the reason many struggle with this critical transition…

One Action To Inject Confidence Into Your Retirement Decisions

Sure, there’s plenty of unknowns, but wouldn’t you want to know whether you’re in the ballpark or not when it comes to living well in your retirement years? Understand the blind spots you can’t see yourself. Sooner, rather than later so you can take decisive action.

So, what’s the one action you can take which will see all the stresses of retirement planning melt away…


The problem is many tools you can access online are simple calculators. Most do not give you the capacity to scenario plan inputs and outputs which will impact your “Enough” number.

But there’s one thing you need to do before this step to set you on the right path…

If you want to retire with more confidence and clarity, you need to get crystal clear on what’s important to you, what you value most in life. When you’re sitting there at the end of life, you’re not going to reflect on the investment return you achieved. Your focus will turn to what you did with your life, what you achieved and what you should have done, the regrets.

This single step sets up a solid foundation to help guide the financial decisions you need to and have to make. It’s the first step we take everyone through prior to any discussions about their finances. You need to understand what the money’s for…

After all, you wouldn’t build a house on a shaky foundation, would you? Ofcourse not, so why should your retirement planning be any different?

Blocking Out The Noise

This is the hardest part and it will test you. You’ve got to pack away your assumptions, biases, distractions and what you think about retirement planning, which is likely to be wrong and focus on the pure numbers. It’s your financial truth…minus the noise.

It means you will need to block out the financial noise and let go of any preconceptions. It’s not easy, but crucial if you want to retire with confidence.

To assist us we have sophisticated cashflow software which can model any scenario. This is a crucial tool when planning for your retirement.

It’s powerful, but you need to know how to drive it and understand the impact of various inputs and the dials you can use to tune your retirement plan.  It puts you in control of your own retirement decisions.

Tune Your Own Retirement Dials

Once you’ve established where you are financially, identified your blind spots and gained a glimpse into your financial future through cashflow forecasting. You’re now able to build out your feasible retirement plan by adjusting your retirement dials.

It’s a little like choosing your own adventure…except you know in advance what the implications will be depending on decisions you make.

Putting you in control of your retirement dials so you decide the retirement path you’re comfortable with.

Now you can make confident financial decisions and understand the impact on your dream retirement.

So what dials will you be able to tune:

  • Work longer, work part-time or retire fully – know the impact of your financial resources over your retirement journey
  • Take more or less investment risk, know the impact over time
  • Want to spend more in your go-go years (first 10-15 yrs of retirement) while your fit and able, will this put you at risk of running out of money or will you be okay
  • What if inflation remains high, model different scenarios
  • Want to gift to family – know the impact on your ability to fund your fund your retirement
  • Adjust your spending through retirement, i.e. know the impact of spending more in your go-go years
  • Have an asset to sell – model different scenarios to minimise the amount of tax you pay
  • Centrelink age pension planning – know when this will kick in and know whether you’ll still be okay
  • Downsize or no downsize

As you can see, the power of adjusting your retirement dials takes many different forms depending on the financial resources you have available.

We call it the retirement feasibility assessment. A glimpse into the future for which gives you control over the decisions you need to make to achieve your dream retirement.

For the majority of people it’s the first time there able to see what their money can do for them. It’s not just a number anymore, but a lifestyle packed full of experiences and memories.

This is the heart of real retirement planning. Helping you identify the lifestyle you want while extracting income safely through retirement. While living a good life and not stressing about running out of money.

Ultimately giving you the freedom to spend confidently in retirement. Isn’t that what you really want?

It doesn’t stop there…

While your retirement cashflow and feasibility are your mainstays in terms of guiding your retirement decisions.

There’s more that needs to be done:

#1 Make your retirement plan resilient

This step is about putting in a bottom layer to protect the hard earned money you have. You need to figure out how to do that.

You need to start putting this in place at least five years prior to retirement.

You don’t want to be at the mercy of Murphy’s Law, where if you decide to retire, the market drops and you’re forced to stay at work. You want to protect yourself from this.

You need to put deliberate safety margins in place so you don’t put your retirement at risk nor risk running out of money because you neglected putting safety margins in place.

In your accumulation years you have greater freedom and as mentioned above, it’s passive. There’s not much involvement on your part.

However, retirement poses many risks and roadblocks you need to overcome. You don’t have your regular income to rely on and you’re left to survive on the assets you’ve accumulated over your lifetime. You’ve now forced to draw on these assets to provide you with your monthly income to live on.

It provides its own unique challenges.

You need to consider how you are going to extract your income over your retirement without putting yourself at risk of running out of money.

This is where building safety margins into your retirement plan is crucial if you are going to protect yourself from the unthinkable.

#2 Optimising your retirement plan

This is where the funky or sexy side of retirement planning comes into focus.

Unfortunately, this is where most start and come unstuck.

Areas to be explored to optimise your retirement plan:

  • Optimal investment implementation to safeguard your income in retirement and preserve your capital for the next 20-30 years.
  • Using the tax and super system to reduce the amount of tax you pay and increase the amount in your super.  Many are missing out on simple ways to save tax and increase their super balances. If you don’t use it, you lose it…
  • Minimising estate taxes or what I call reducing or eliminating your tip to the tax office on the way out the door.

Many struggle with this aspect. Understanding the ins and outs can be extremely complex.

Some of these strategies take years to implement but the rewards are real. One reason why you can’t delay your retirement planning.

Far too often we see couples and individuals put off their planning for retirement. It almost always means they have missed out on opportunities to boost their retirement savings…

Cost Of Inaction

Life is busy and retirement planning is hard. Many people are at risk of running out of money in retirement because they are drifting towards retirement.

Are you at risk of running out of money in your retirement years?

Deferring your retirement planning is costing you money and more importantly, the ability to experience more and create more memories in retirement.

If you’ve been hesitant to seek advice, I know how you feel…

It can feel daunting discussing your financial situation with someone, and it’s normal to question whether it’s the right step for you at this moment.

Many of my current clients felt the same way before they decided to work with me. They were unsure if they would truly benefit from our retirement planning services.

However, what they found after taking the first step was enlightening.

They discovered that having a professional look at their financial situation helped them identify opportunities they couldn’t see themselves.

It wasn’t just investment advice; it was about building a roadmap for their future, aligning their financial decisions with what was most important to them and gaining peace of mind they hadn’t experienced before.

It’s a turning point for them…

They feel more in control of their financial future and are less anxious about the unknown. For some this means bringing forward their retirement dates earlier than they thought.

Inaction costs you time and money…time is not an unlimited resource.

I urge you to take action and start planning your retirement today, whether that’s with another planner or us…

Book your Retirement Clarity Call by clicking here to gain insights into resolving your retirement challenges and concerns once and for all.

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

We work with people in Adelaide and around Australia virtually via zoom!

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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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