When should you start planning for retirement?

If you plan on retiring at 65 years old, chances are you’ll need your retirement savings to last you around 15 to 20 years – at least.

Saving for retirement can be daunting whether you’re still in the middle of your working career, nearing the end or already retired. The good news is, however old you are, there are always ways to create a more comfortable retirement for yourself.

When should you start planning for retirement?

The earlier you start planning for retirement, the better. Even if you think retirement is a long way off, it’s important to think about how much money you will need, what kind of retirement lifestyle you want to lead and how you can give yourself a head start. 

40s and early 50s

When you are in your 40s and early 50s, it’s easy to push your retirement to the back of your mind. Things like paying off your mortgage, sending your kids to school and looking after elderly parents can seem like more pressing commitments. However, taking time to plan for your retirement will make it easier for you in the long term.

Good steps to take in your 40s and early 50s include:

• Do the maths and figure out how much you will need to live comfortably in your retirement. Don’t forget to factor in bucket list goals and travel.
• Sort out your superannuation. Remember if you are a business owner, you are responsible for your own super. You may prefer a self-managed super fund (SMSF).
• Get on top of your debt. Seek advice about ways to reduce your debt. For example, making extra contributions toward your mortgage.
• Consider making additional contributions to superannuation to help boost your retirement savings and reduce your tax e.g. salary sacrifice or personal concessional contributions to super.
• Sort out your personal insurance cover to ensure you have a safety net if you are unable to work due to a disability Illness or death.

50s and early 60s

If you’re in your late 50s or early 60s, it’s not too late to start making a positive move towards a more secure retirement. This is a great time to work out a retirement plan and figure out how you want to transition out of work. 

Steps to take as you move towards retirement include:

• Make non-concessional contributions to boost your super.
• Consider a self-managed super fund (SMSF) to have greater control over your super.
• Look into a Transition to Retirement (TTR) pension if you want to reduce work hours without losing your income.
• Review your personal insurance cover to ensure they reflect your financial position.

Over 65 years

If you are already in retirement or considering your options, there are still some things you can do to make your retirement more comfortable. Considering that your retirement may last 20 years or more, financial decisions you make now can still impact your future.

Things to consider if you are over 65 years old include:

• Get advice about what to do with your super – whether to take it out as a lump sum, start a super income stream or leave it in there.
• Review your investment strategy to better suit your retirement needs.
• Plan your living situation. If you sell your home, you may be able to contribute up to $300,000 to your super.
• Make sure you have the proper estate planning and that you have the right people stepping in for you to make financial and personal decisions on your behalf if you are unable.

Planning for your retirement can be daunting, whatever age you are. Make sure you seek professional guidance and financial advice when making decisions about your future.

The team at Lawrence Group helps busy business owners, working professionals and couples approaching retirement work towards a comfortable retirement that aligns with their goals. Give us a call today for a free initial consultation.