Planning for retirement can be both an exciting and daunting time of your life.
Here are our top six tips for making sure you are on track for retirement.
1. Take stock
How do you want to live in retirement? Now do the numbers. How much will it cost? How much have you saved? Do the figures meet your expectations? If not, what action do you need to take now?
2. Plan for the rest of your life
Most people are retired longer than they expect. While your health and family longevity will influence your life span, if you've survived life's early risks, such as accidents or illnesses, you could easily live into your nineties or older. Plan for the long term, and don't forget that you may need extra assistance or care as you get older.
3. Review your investments
For your savings to last the rest of your life, you need to invest for the long term. And that means getting the investment mix right, with a balance of income and capital growth. Diversifying your investments across cash, fixed interest, shares and property will help reduce risk and achieve smoother, more consistent returns over time.
4. Stick to your plan
Investments can quickly change in value. While it can be tempting to sell everything when the market falls and put all your money in cash, that's often the worst thing you can do. It's important to remain focused on the long term as the market usually recovers if given enough time.
5. Get the structure right
By changing the way you own investments and receive income, you may be able to reduce the amount of tax you pay while also increasing your Centrelink or Department of Veterans' Affair benefits. Even if you aren't eligible for an Age Pension, you may be entitled to discounts and other benefits, which can save money over time.
6. Get your affairs in order
Estate planning allows you to pass on the right assets to the right people at the right time. The first step is putting a Will in place, but you should also speak with your solicitor about an Enduring Power of Attorney and medical care directive. These can help your family fulfil your wishes if you're not able to make decisions yourself. And remember to review your estate plan at least every 3 years.
Our financial planners are representatives of BankVic. Any advice given will be general, in that it will have been prepared without taking account of your objectives, financial situation or needs. Because of this, before acting on the advice, you should consider whether the advice is appropriate for you.
Information on this page is general in nature and does not take into account your personal circumstances. You should consider whether it is appropriate for you before acquiring the product. See www.bankvic.com.au/self-service/forms-and-documents for important information relating to these products.