How to Plan Early For Retirement

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It’s strongly advised that Australians should plan as early as possible for retirement. Not only does this leave you with more savings to spend in your sunset years, it will also leave you with more options to increase savings. Planning for retirements involves careful scrutiny and organizing of personal finances. You will have to calculate your income potential until you retire to save enough to be comfortable in later years. With that in mind, here are several tips for planning early for retirement: 

Do an Initial Assessment of your Personal Finances  

You know how much money you make every month, but do you know how much money you spend? Before you plan for retirement, you need to sit down and do an assessment of your current financial situation. Make a household budget with income and expenditures. Take into account how much your assets, such as the house or savings account, are worth. If you already have a super, find out how much you have made already and when you can get access. Then, think about how your finances would be when you retire. Would you have the same expenses, such as for mortgage, health expenses, debt and so on? Use this assessment to find out how much money you will need to retire comfortably.  

Learn About Super Funds and Age Pensions 

You should know when you are eligible to apply for age pension and also when you can access your age pension and super. Plan early on to manage your super, pension funds, and any additional savings accounts you may have. If you want to take control of how your money is invested, you can choose a self directed super. Regardless of the retirement savings tools available to you, it’s recommended to learn all about these funds. For example, you can take self managed super funds courses Australia online or with a reputed agency to learn share trading and how you can invest your money. Do your research well, and you will be able to plan your retirement finances better.  

Make a Retirement Financial Plan 

It’s not really possible to know exactly how much you will need for retirement, but you can make a financial plan. Think about what your needs would be when you are over sixty. Would you still need to pay debt or rent? Or more realistically, would you want to travel, buy a new house, or engage in a hobby that costs money? Make a liberal estimation of the amount of money you will need to lead the life you want in retirement. Take everything into account, such as health expenses. Once you do, you will have an idea of how much you need to start saving for retirement.  

Prioritise Paying Off Debt 

Do you really want to retire with debts still on your back? Start early on to pay off any debt you have, such as personal loans, mortgages, car loans and so on. Some people prioritise debt payments without saving for retirement. Financial experts advise doing both at the same time. Do pay off debt, but also to pay for retirement. Make a plan to be debt free before you retire. Keep in mind that as a retiree, you will not have a steady income that comes from a job. Therefore, being debt free is quite important for being financially secured later in life.  

Do find other ways to increase your fund availability in retired years. Start with the tips given above.  

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