![]() ![]() Speaking to a financial adviser can help determine the best way forward, to manage your debt leading into retirement, while also making sure your retirement goals are on track.ġ ASFA Retirement Standard – December quarter 2021 Ģ 2020Australian Bureau of Statistics, 4 November 2021. However, it doesn’t always have to be all or nothing in terms of diverting your available funds to reducing debt or contributing to super for your retirement. You may want to consider a plan to proactively clear your debt by reducing the amount you owe, thereby strengthening your financial position when you retire. Having no debt, or very manageable debt, will reduce your money worries in retirement. Even if you’re continuing to work part-time, you might still be eligible to receive a social security payment or benefit – such as a partial Age Pension to help supplement your reduced income. Holding off your retirement, even for a few years, could significantly increase your retirement nest egg. And transitioning to by working part-time can help you prepare – financially, socially and emotionally - for what is a major change in your life. If you’re flexible with your retirement date, one alternative is to consider delaying your retirement by continuing to work, or working part-time instead of retiring completely. This means you’ll reduce your taxable income for the financial year and potentially pay less tax, while adding to your super balance. If you make a personal contribution, you may be eligible to claim a tax deduction too. Contribution caps are limit to the amount you’re able to contribute each year without paying additional tax. You can add more into your super on a regular basis using your before or after-tax income. There are things you can do to turn your situation around. If you find that you may fall short in achieving your desired lifestyle on your projected savings, don’t panic. ![]() There are retirement calculators available to help with this. Then factor in your future earnings and what you can save from those earnings. To understand where you currently stand, you need to add up any savings/assets you hold inside and outside of super minus your debts. Return you earn on those investments and income from other sources.Value of your super and other investments.The next step is to evaluate how much you’re likely to have by the time you retire, if you continue with your current savings strategy.Īnd this will come down to a variety of factors including: Are you on track to reach the lifestyle you want? While no one can predict how long they’ll live, if we use the average life expectancy of 81.2 for males and 85.3 for females 2, you can estimate spending around 20 years in retirement assuming you retire around 67.ģ. Once you have an idea of what your retirement lifestyle will cost, the challenge is to ensure your cash lasts the distance-however long that may be. Keep in mind that while you’re likely to have fewer expenses in retirement-you won’t be contributing to your super, you might pay less tax and may have paid off your mortgage-inflation can eat away at your retirement savings.įor instance, if you choose to invest conservatively by having your portfolio solely focused on defensive assets like cash and bonds, your returns may not be enough to offset the rising cost of living.Ģ. You’ll also be able to determine your total amount of savings needed to meet your desired lifestyle. Once you’ve estimated what your annual retirement income might be, you can start thinking about where you’ll be able to access it from such as your super, part-time work, or social security entitlements. For example, the types of holidays and frequency, where you’d like to live and your recreational activities. ![]() So, if you really want to end up with the retirement you envision, there are some things you can start doing right now.ĭetermining how much annual income you’ll need to maintain your lifestyle in retirement is key and will depend on the type of lifestyle you want in retirement. While many of us dream about the day we finally get to give up work and reap the benefits of our blood, sweat and tears, we often struggle to plan for it.Īfter all, in the scuffle of immediate priorities, saving and planning for retirement don’t always make it to the top of the pile.īut there’s a good chance you could be spending almost as long in retirement as you will be working. ![]()
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