What Is A Retirement Plan?

What Is A Retirement Plan?

I love to cook & entertain.  Do you love to cook?

I’ve had a lot of successful outcomes and then I’ve had some big failures.

You know what, the reason for big failures is that I missed an important ingredient, I didn’t follow the recipe.

The recipe is there for a reason, to ensure you have all elements of a dish, make it taste good.

Retirement Planning is no different.  There’s are steps that need to be followed to make it a successful, to ensure to get your DREAM Retirement…

Do you have your Recipe for your DREAM Retirement?

What we find working with clients that are tracking towards Retirement and those who are doing Retirement, their Recipe (aka Plan) is different depending on the Retirement they are working towards.

A Retirement Plan for our clients does 5 things.

#1 It states what type of Lifestyle they want, day-to-day lifestyle, travel, car changes, helping the family, hobbies, and more.

#2 It states the cost of what it’s going to cost.

#3 Outlines the tactics and strategies that need to be employed to make it a reality.

#4 How to protect the plan so that you are in control, not external events like world events or investment markets.

#5 As with all plans, life happens, they are constantly being reviewed, iterated and adjusted for changes.

The Right Process…

The first step is working out what type of lifestyle you are wanting for yourself.

It’s answering the below questions:-

What type of retirement do I want?

How much do I need to fund my lifestyle?

Will I run out of money?

When can I retire?

How do I protect my retirement lifestyle?

How do I transition from a regular paycheck to an income in retirement?

While this list is not exhaustive, they are the main questions that need to be answered in a written retirement plan.

So, when we bring this all together what does it look like?

What Type Of Retirement Lifestyle Do You Want?

Are you wanting the flashy lifestyle?  Where you are dining at nice restaurants with friends all the time, driving the latest car and traveling overseas every year business class?


Are you wanting the standard lifestyle?  Where you can live comfortably, do the odd overseas holiday, travel around Australia a little, maintain a good car and help the kids a little?

Nothing flashy but still rewarding.

Here are some of the questions that we ask our clients before we start any planning:-

#1 What are you doing on a regular basis and if you needed to trim it back what would that look like?  It’s the day to day lifestyle you are wanting.  It’s different for everyone.

#2 What are your once-off capital expenses?  Are you going to be buying a caravan and 4wd to discover Australia?  Are you going to be changing homes or undertaking some renovations to your current home?

#3 What travel are you looking to undertake?  Are you looking at regular overseas holidays or are you planning one-off adventures to experience?  Or do you want a travel fund where you can decide year to year what                           experiences you want and how much you spend on them?

#4 How often are you looking to change your cars?  Is it once every 10yrs or once every 5 yrs and how long would you be looking at maintaining this schedule?

#5 Are there any special celebrations you are wanting to finance?  Is it a child’s wedding, a special celebration or a special birthday?

#6 Are you wanting to help the family out?  Do you want to help finance your grandchildren’s education?  Do you want to help fund a child’s house purchase?

#7 Are you wanting to leave a legacy? What does this look like?

#8 Is there anything else that’s not covered in the above questions that would involve a lump sum?

While not exhaustive these are some of the questions we ask our clients to gain a clear understanding of what type of retirement they want.  It’s the starting point which will no doubt change as you go through the process and the years pass and priorities change.

Let’s be honest though, most don’t know exactly what they want in retirement, although there are a few who have this mapped out to the smallest details.

Here, I ask to put any misconceptions aside, what you think you can’t do.  Be a kid again and dream a little.  You can always prioritise and pare it back.

It’s an opportunity to get it all on paper and give you the power to make changes based on some of the results below.

What’s all this going to cost?

Now it’s time to start putting a cost on it.

While this is important, I find that most can struggle with this part, so it’s important not to bogged down in the detail.  If you’re unsure, make a guess at this stage.  There’s plenty of time for refining it later.

At this stage, you just need something that can assist in making the right decisions towards your DREAM Retirement.

It’s time to put a cost on everything you are looking at having in retirement.  This will assist in giving you the numbers to work towards.  The tactics will come later.

However, the biggest mistake is thinking you are going to live till your life expectancy (ie. when the government thinks you’re going to die).

These are the government tables that tell you how long people are going live based on your age.  These are the numbers that most retirement calculators use.

Don’t be fooled by these numbers.  It’s likely you are going to live longer or less than these numbers dependant on your family history and current health.

For most of our clients when calculating how long they live we take this number to at least 100.  The current stats are that there is a 50% chance that one in the couple will live into their 90’s.  Best to err on the side of caution here.

How do you protect your retirement lifestyle?

Now that you know what your retirement looks like, at best a good guestimate, the path is starting to look a lot clearer.

You want to make sure you protect it, after all, you’ve worked so hard to get to this stage.

You would not believe the number of people that miss this step and regret it when things go wrong.

When I talk about protecting your retirement lifestyle, it’s all about the little steps you put in place that no matter what the markets, world events or economies are doing you will not have to compromise.  And if you do you will have the control and levers to pull if you want too.

Don’t forget retirement is not the time be maximising your return ( and this is what the majority of planners still do, hell, the industry is built around this).

It’s all about achieving the lifestyle and experiences you had planned.  What’s the minimum dosage of risk you need to take to get the job done?  You may find you don’t need to take as much risk as you think…

Working with many clients who are walking this journey, I have found that was concerned them pre-retirement is very different from what concerns them in retirement.  All they are concerned with is that they have enough money to do what they had planned to do, rarely does maximising their return on investment come up.

It’s all about maximising their return on life, getting the most out of life, it’s the experiences.

Let me ask you this question:-

“If you never ever beat the market but you were able to achieve everything you set out to achieve?”  Would you be ok with that?

I’m being a little presumptuous here, but I’m pretty sure your answer is yes.  Let me know if its something different, I’d really like to know.

How Do You Protect Your Retirement Plan?

Here’s our shortened version of what we do…

It’s all about preparing for the worst.

For our clients, we look to hold 3-6mths of income in an emergency account.

We then look at the capital expenses that are going to occur in the next 12-36mths and hold this in very conservative investments.

Then we look at their investment structure and for most, they have account-based pensions.  So we look to hold around 2-3yrs worth of income in cash or very conservative assets.

But hey Glenn, that’s way too much in cash.

You’ll be thanking me when the next correction comes.  Just ask anyone who was retired when the Global Financial Crisis hit, this saved our clients from the headache of sacrificing their lifestyle in a time of great distress.  The power is in your hands, not the market…

The real power of this strategy is that you have levers to pull when things aren’t going so well.  The power to make changes based on your terms, not the market or other external factors happening at that point in time.

Although you may not be getting the maximum return, you have peace of mind and can stress less about money and worry more about ROCKING your RETIREMENT, not downsizing it…

Stress test your numbers…

This is the number one thing I see most planners not do.  It’s just not in their nature.  They do the standard calculations and never stress test it against certain scenarios.

But what do you mean by stress testing the numbers Glenn?

While we don’t know what the future is going to hold,  we can at least stress test based on past history.

We use a tool to complete this stress test based on our client’s retirement plans.  Based on real numbers and investment portfolios we use now.  The tool is able to generate a base case, pessimistic case, and an optimistic case, giving our clients more clarity about the decisions they can make.

It gives our clients the information to make informed decisions.

Based on this information, you may be able to add more experiences early on in your retirement when you are healthy or based on the results you are in a position to prioritise what you want better.

You can stress test front-loading expenses in the most active years of your retirement and work out whether you will still have enough.

You’re able to make more informed decisions about the amount of risk you take.

You may find that taking less risk will still allow you to achieve the retirement you are aiming for but with less risk and movement in your investment portfolio.  How powerful is that?

Do you have your Retirement Plan in writing?

While we have covered a lot in this post, I’ll think you’ll find there is a lot more to securing your retirement lifestyle than what you thought.

You see the majority of the financial planning industry focuses on maximising your risk, not giving you the best opportunity to live your retirement lifestyle.

We’re more concerned with our client’s balancing a great life now while not sacrificing for tomorrow, making the most of the only life they have and making sure they have every avenue covered so they have more than one lever they can pull if and when they need too.

The key here is having a written plan that covers that.  It outlines the retirement you want, what it’s going to cost, what you need to do to achieve it and a strategy to safeguard your retirement lifestyle.

What’s in your retirement Plan?

Do you actually have one?

Are you just winging it or do you really want to get this stuff sorted so you know what the options are and know what’s possible?

So, what are you going to do about your retirement plan?


Struggling to work out where to start or whether you are on TRACK to Live your DREAM Retirement?

Book your  Rock Retirement Call now!

What will you achieve on this call?

We won’t be selling you anything, there won’t be time for this.  Given the investment of time in these calls we’ve had to limit them, so if you find all the times are taken, you’ll have to wait until next month.

You’ll achieve 3 things from your call:

#1 We’ll help you define the lifestyle you are working towards, even if it’s only a guestimate, it’s something you can start working on.  We’ll help you define the cost of it.

#2 You’ll receive a short report, detailing all the important that will put you in a position where you have more control over the direction you’re heading in.

Your short report will contain:-

  • A detailed listing of your dream retirement lifestyle
  • You’ll know what your Dream retirement will cost
  • You’ll have the information to know whether you are on track to have enough
  • We’ll provide some options you can consider to improve on your current position

#3 Two Bonuses

  • Because we know life is busy, we want to make sure you get practical information you can use.  Firstly we’ll give you access to our interactive risk profile tool.  It’s something new we have introduced for clients.  Rather than answer questions that most use in the industry, this interactive tool is backed by science.  You are given six scenarios and you choose the level of upside and downside you are willing to accept.  What you get is an answer to the real risk you are comfortable taking with your investments.  Never be in doubt.
  • Want to know you are going to have enough.  We’ll also stress test your retirement plan for you.  We’ll run it against different market cycles.  You’ll know how you’ll fare against a base case scenario, pessimistic and optimistic scenario’s.  You’ll have the information to make an informed decision about the amount of risk you need to take to get the job done.

You’ll have 80% of the information to better your retirement plan and make the most of the only life you have.

CLICK HERE to book now>>  These calls are limited.

Make it a great Life!

Challenging the Status Quo!

Glenn Doherty – CFP – Founder & Financial Organiser at Jigsaw Private Wealth

Website: jigsawprivatewealth.com.au

Email: gdoherty@jigsawprivatewealth.com.au

Mob: 0401 253 729

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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.