An Investment Trends (2016) report reveals that more than half of Australians retire sooner than they initially expected.
So when is the best time to start planning for life after work? The answer is ‘now’.
Here are some steps you can take today to prepare:
Know your financial position
Having a good knowledge of the money you have available if you stopped work unexpectedly – including super, savings or government entitlements – is a great first step in your planning process.
Next calculate your daily expenses such as bills, food and entertainment, and estimate any emergency expenses, such as repairs or health bills. Your current financial position can be best summarised by knowing if you have enough money coming in to cover all these costs.
Understand when you can access your super
Superannuation is designed to support you with an income source when you retire. That’s why super is ‘preserved’ until an age determined by the Australian Government. Currently, this age is between 55 and 60.
Reaching preservation age means you could use your super as an income source if you happened to retire unexpectedly. Your choices include:
• accessing super as income payments, such as through a retirement income account
• taking your super as a partial or full lump sum
• keeping your money in super to give it more time to grow.
Speak to someone
As you approach retirement, planning for your financial future doesn’t need to be something you tackle on your own, so now is the time to find out more about how you can prepare.
Planning ahead can make a big difference to the amount of finance you have in retirement and help you feel in control even if retirement comes earlier than you expected.