[SPONSORED CONTENT] If you’ve been dreaming about early retirement, rising inflation might seem like a roadblock. It can erode the purchasing power of your savings and disrupt the financial plans you’ve spent years building for yourself and your family.
Navigating your early retirement journey
But that doesn’t mean your goals are out of reach. You might just need to take a slightly different approach. By adjusting your savings strategy, diversifying your investments, and being aware of the risks, you can still make early retirement a reality.
Building a solid foundation for early retirement
- Save more, save smarter
Inflation can hit harder in retirement when you have fewer chances to increase your income. Therefore, it’s important to explore strategies that can help enhance your savings.
- Look for ways to cut back on unnecessary expenses—compare your energy bills using sites like Energy Made Easy or reconsider big purchases like holidays and home renovations. Building a buffer now will help protect your finances in retirement.
- Diversify your investments
Not all assets are affected by inflation equally. A diversified portfolio can help you manage risks while aiming for long-term growth.
- Balancing shares and property with safer assets can ensure you’re not overly exposed to market fluctuations. Don’t forget to stay informed on superannuation thresholds and rates—check the latest super rates to make sure your contributions are optimised.
- Keeping some cash reserves on hand can also give you flexibility during downturns.
- Be aware of sequencing risk
Markets can be unpredictable, and that unpredictability becomes a bigger concern when you’re close to retirement. If a downturn hits just as you’re retiring, your savings could take a hit—this is called sequencing risk. With the Reserve Bank navigating uncertain waters, having a backup plan might help.
- Consider delaying retirement until your investments recover, cutting back on initial expenses, or using cash reserves before dipping into shares or property. This way, you can avoid locking in losses and give your investments a chance to bounce back.
- Reassess your expectations
Inflation might mean adjusting your retirement plans. Consider tracking your spending or lowering withdrawals when markets are down. Also, you might find part-time work can help supplement your savings.
Additionally, check your eligibility for government benefits that could supplement your retirement income. For more details, refer to the Government Benefits Guide.
Plan for the long haul
Retiring on your own terms can be challenging, particularly with the uncertainties brought on by inflation. However, you don’t have to navigate these challenges alone.
That’s where Fiducian Financial Services can assist you in developing a strategy in-line with your needs.
A professional financial adviser can guide you in addressing your unique financial situation. They can help you to create a plan that aligns with your financial life goals. This approach can provide clarity and confidence as you work towards your retirement objectives.
Take the first step today:
Download a copy of Fiducian’s Retirement Ready Guide, The email you receive containing your Retirement Ready Guide will include a link so you can schedule a consultation with one of Fiducian’s financial advisers.
Disclaimer: This information is provided by Your Life Choices Pty Ltd. It does not have regard to any investor objectives, financial situation or needs. Investment and tax advice should be sought in respect of individual circumstances.YLC has chosen Fiducian Financial Services Pty Ltd as its referral partner for the provision of retirement planning services for members. YLC may receive a referral fee from Fiducian.
