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Navigating the Path to a Comfortable Retirement: Why Seeking Financial Advice is Crucial

Writer's picture: Andre DirckzeAndre Dirckze

Updated: Jun 19, 2024

As you approach your 50s and 60s, the prospect of retirement often looms large. This period of life is a crucial time to make strategic financial decisions that will determine the quality of your retirement years. According to the Westpac ASFA Retirement Standard, a "comfortable" retirement for a couple requires an annual income of about $72,663, while a "modest" retirement necessitates $51,630. The gap between these figures is significant, highlighting the importance of strategic planning to ensure a fulfilling and stress-free retirement.

The reality is stark: without proper planning, many could find themselves struggling to meet even the basic needs in retirement. However, the good news is that it’s not too late to take action. By seeking the expertise of a financial planner, you can set a course towards a secure and enjoyable retirement.


Seven Steps to Secure Your Retirement


1. Understand the Life You Want in Retirement


Before diving into the financial details, take the time to define what a fulfilling retirement looks like for you. Do you envision traveling the world, spending more time with family, pursuing hobbies, or contributing to your community? Understanding your goals and values will help you create a financial plan that aligns with your desired lifestyle.


2. Determine the Resources You’ll Need


Once you have a clear vision of your retirement, estimate the income required to sustain it. While a common guideline suggests needing 70-85% of your pre-retirement income, individual circumstances vary. Break down your expected expenses, considering categories like lifestyle, healthcare, and travel. A financial planner can help you determine how much you need to save to meet these needs.


3. Boost Your Super


With retirement approaching, maximizing your superannuation contributions can significantly enhance your financial security. Take advantage of concessional and non-concessional contribution caps to boost your super. Catch-up contributions can be particularly beneficial if you’ve undersaved in previous years. These strategies not only increase your retirement funds but also offer tax advantages.


4. Have a Debt Strategy


Managing debt is crucial as you near retirement. Prioritize paying off your mortgage and other high-interest debts to free up more funds for your retirement needs. A financial planner can help you weigh the benefits of extra super contributions versus accelerating mortgage repayments, ensuring you choose the strategy that best suits your situation.


5. Create a Retirement Pay Cheque


Transitioning from a regular salary to retirement income requires careful planning. Consider setting up an account-based pension, which offers flexibility and tax advantages. Assess whether you qualify for the government age pension and explore other income sources like investments. A diversified approach can help ensure a steady and reliable income stream throughout retirement.


6. Invest Intentionally with Realistic Expectations


Your investment strategy should align with your retirement goals and risk tolerance. Focus on total returns rather than solely on income or dividends. A well-diversified portfolio can help mitigate risks while aiming for the returns needed to sustain your retirement. Understanding market volatility and maintaining realistic expectations are key to successful long-term investing.


7. Know How Long Your Money Will Last


Projecting the longevity of your retirement funds involves considering various factors like living costs, investment performance, and unexpected expenses. Financial planners use sophisticated tools to create projections that provide a clear picture of your financial future. This insight can guide your spending and investment decisions, ensuring you don’t outlive your savings.


Taking Action Today


The earlier you address your retirement planning, the better positioned you’ll be to enjoy your golden years. Many Australians find themselves in a more secure financial position after seeking professional advice. At Wealth Effect Group, we’ve helped countless individuals retire on their terms, often sooner than they expected. We can help you define your retirement goals and take the necessary steps to achieve them with confidence.


Don’t leave your retirement to chance. Visit wealtheffectgroup.com.au/book-15min-chat or call us on 1300 459 101 to start planning for a comfortable and fulfilling retirement today.

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