After working 30 or even 40 years to fund your lifestyle in retirement. The last thing you want is to be plagued with worry and uncertainty in your retirement years.
They are called your “golden years” for a reason.
A period in life where you look forward to spending more time on the things you enjoy and less on the things you don’t.
A point in time where you choose whether you continue to work or not!
Whether that’s taking off for three months during winter to the warmer parts of Australia.
Spending more time on your hobbies. More time with family and friends.
The last thing you want is for it all to turn to tin!
Retirement Blunder #1: Leave their planning to the last minute
It’s fascinating that people spend more time on planning their two week holiday than they do on planning for their retirement. A retirement which could last 30 or 40 years.
It gets me thinking why…
And then I googled “retirement planning”. Guess how many results came up…445,000,000 results.
No wonder people put this in the too hard basket. It’s like death via a thousand cuts!
It shouldn’t be that way…
It should be an inspiring experience to plan for all those experiences you are dreaming of when you have more time on your hands. Planning for doing more while you are fit and able.
While making sure your financial resources will last the distance!
Your second week!
Remember on your last holiday (when we could go on holidays), where the first week feels like it takes its time from day 1 to day 7. As you settle into the groove…
Then all of a sudden after the second week you’re back on your way home. Thinking, where did that second week go.
Well, if retirement is on the horizon, you are in your second week…
Don’t let time be your enemy and leave all your planning to the last minute.
I’ve lost count of the amount of meetings we’ve had, where I’ve left thinking, I wished they had come to see us sooner. Too many lost opportunities.
If you’re sitting there with retirement knocking at your doorstep, you need to start planning now.
Retirement Blunder #2 Invest in the wrong investment strategy
Ah, the good old hope and prey strategy.
There’s two extremes…too conservative on one end.
Think back to March 2020 when share markets around the world fell like a lead balloon due to COVID shutting countries down. Many panicked and fled to cash.
Understandably, people fear losing their money and in an attempt to stem the slide, they opt for safety first.
This would prove to be a devastating blunder with investment markets going on to post record returns in the 2021 financial year.
On the other end, you are too aggressive.
There’s a mindset shift required as you approach and transition into retirement. The focus moves from accumulation to risk management.
It’s not to say you need to be conservative. Managing your risk strategy becomes the focus.
Positioning yourself to ride the ups and downs of investment markets.
Both can wreak havoc on your retirement!
Knowing your numbers is key here. One of the very first actions we take with any potential new client is conduct detailed cash flow projections. Prior to looking at investments, products or strategies.
We want to know how their current path might pan out.
Once known, it helps with planning a best fit investment strategy combined with formulating a plan for delivering a reliable income in retirement.
Retirement Blunder #3 Adopting a conservative withdrawal strategy from their super pension account
You want your twilight years to be the best years of your life. It’s time to reinvent yourself. Try new things…experience new things.
It’s a common thought to withdraw the minimum pension from your super in retirement. That way your money will last, right?
Far too often we see people defer experiences, put off doing the things they wanted too. Only to find an illness has stopped them in their tracks. Or their health prevents them from doing these things.
Leading to regret!
Surely, you don’t want to be lying there on your deathbed, realising…you could have done more things!.
You didn’t take that dream holiday to Europe. You flew economy when you could have gone business class. You didn’t help your children out when they really needed it.
Perhaps you worked longer than you needed too. Perhaps you worked till 67 when you could have retired at 60!
And then…there you are…on your death bed…with all that money…but no time!
Don’t get me wrong, you still need to be prudent with your money. But what if you could plan to do more while you’re fit, healthy and able too? Lived more!
All the while financially, you’d still be okay or have enough money to last for the rest of your life.
The retirement balancing act!
While most posts you read on retirement planning focus on the money conversations. Technical and transactional strategies.
It’s important to consider what’s going to contribute to your long term happiness and wellbeing.
To plan your successful retirement, you need to think of it in terms of a journey.
Your retirement journey will involve many twists and turns along the way!
Recent events such as COVID are perfect examples of one BIG twist.
All international travel plans came to a complete halt. We saw many clients focus more on local travel where restrictions allowed.
Once reason we advocate being agile in your retirement planning.
Retirement Stepping Stones
Whether you plan to retire fully from the workforce or move to part time work. The first step is to find out how effectively you are using your money to enjoy life today while having enough to enjoy tomorrow.
We have a free Return on Life (ROL) quiz you can complete to determine how well you are living your best life with the money you have.
The next step is to book a Retirement Success Session with us. In your Retirement Success Session we’ll help you work out what is possible with the money you have. In other words, you’ll gain a glimpse into the future so you can plan with purpose today!
Glenn Doherty – CFP – Retirement Planning Specialist | Retirement Planning for Over 55’s powered by Life-Centred Financial Planning