During my time as a financial planner probably the most common question I received was “What do I need to do so I can retire?” Not very surprising I guess, as I was in the retirement planning business after all. It would have been pretty odd if the most common question I received was – “are elephants hard to domesticate? Well I have absolutely no idea about elephants, but thankfully I know a thing or two about retirement strategy!
Not to put too fine a point on this discussion, what I am going to list shouldn’t be
seen as a definitive nor an exhaustive checklist to enable us to embark on our leisure years. After all, everyone is totally different in how they approach retirement and what they aspire to do during it. It is also a function of the many financial variables specific to our own lives. What I will say is that the 5 points generally cover an overall concept that will ensure you the least amount of money worries at a time when you want to enjoy yourself.
1. The number one and absolute best strategy is to own your home. As I used to always say to my clients “If nothing else, it is far better to starve to death in the comfort of your own home!” Retirement is about reducing worries, and just knowing you have a roof over your head, a place to return to from travelling and a sanctuary for family members in need, eliminates the most basic of anxieties. Renting, no matter how detailed your adviser has created the ‘renting versus owner- ship’ spreadsheet, just doesn’t deliver the same contentment.
2. Maximise your superannuation. In other words go hard throughout your working life in terms of contributions. Add as much extra as you can, obviously within Government limits. Examine your investment options to maximise returns at the appropriate stage of your investment lifecycle.
3. Eliminate debt, this speaks for itself and includes all credit cards, personnel loans and everything else.
4. Create some savings outside of super. Develop a strategy to accumulate funds alongside your superannuation savings. The government (all political persuasions) I think anyway, are unable to be trusted to not alter super at some future time. This alteration could mean lump sum withdrawals may be stopped or greatly reduced. Be ready should it happen.
5. Ensure you have all the necessary estate planning issues dealt with. Wills, binding death nominations in your super and all the other bits and pieces, allowing your family peace of mind and to give you, a worry free transition to the afterlife!
As I said, this is not exhaustive, nor is it comprehensive, rather it provides some thought starters to allow you to commence your own planning and checklist.
