The End Of Financial Year agony is over and the inevitable day of reckoning with the accountant and financial adviser is in the rear-view mirror.
It was a very different meeting this time around with discussions about retirement and having enough money to live on if I give up work. I’m not going to but he insisted on talking about what I would need to do if I did decide to go down that road.
A really startling statistic I heard from him was that the majority of Australians live on a post retirement annual income of $45,000 per year, with the top 10 per cent spending about $70,000 per annum.
I was quite shocked by those figures considering many, many Australians receive the Age Pension and as the nightly news frequently reminds us, so many of our older citizens are struggling with the high cost of living.
Working out your retirement income – preparing for the time when you no longer want to work or are unable to work – is such an important task that most of us put if off until forced to consider it.
Financial planning is somewhat akin to going to the dentist – painful but necessary. Below are a few tips that might help you plan – from someone who also has to do this.
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1. Decide what sort of lifestyle you want to lead
There is no point wishing and wanting five-star travel if your retirement income does not allow you to do that. The clearer you are on what you want your post-work life to look like, the more likely you are to achieve it.
2. Realistically assess your current financial situation – key word, realistically
Understanding how much you need to live on and what you currently spend your money on is the most important step. It’s crucial you know what your weekly, monthly and annually reoccurring costs are, because only then can you figure out what’s left.
3. That dreaded word, budget
It can make all the difference to your quality of your life yet few of us create a budget, let alone stick to it. Obviously, the earlier you start, the better off you’ll be in retirement. But, as the financial adviser decreed with a steely glance in my direction: “You’re never too old to start!”
4. Review your investments
Are they working hard for you? What is the level of risk? Could you be doing better? This is where the help of a financial adviser can be your best decision.
5. Reduce your debt
Pay off high-interest debts like credit cards or personal loans. Aim to enter retirement debt free so you can enjoy greater financial freedom and peace of mind.
6. Research and understand your entitlements
There are a number of initiatives for retirees that can make a big difference to your budget. Everything from a seniors’ card, which you can use in some cafes, restaurants and clubs to get discounts to transport cards to medical and pharmaceutical assistance. Surprisingly, a lot of people don’t spend the time to find out what they might be eligible for. It might not be much, but something is better than nothing.
So it’s on to the 2023-24 financial year – now where’s that budget book?
Have you mastered a budget? What’s your advice for those who put their head in the sand on this front? Share your ‘secrets’ in the comments section below.
Also read: But what do I do now? (How to plan for a fulfilling retirement)
Louise Di Francesco is a communications guru and owner and operator of Over Fifty Still Fabulous where she shares her views on the topics that matter for over-50s. This article originally appeared on overfiftystillfabulous.com.au and is republished with permission.
