Photo Credit: Tax Credits
If you’re anything like us, you often spend your Sunday night before work casually planning for retirement…surely it can’t be too far off, right?
After a particularly leisurely weekend and unhappy Monday morning, we have decided to take these contemplations one step further and blog about it.
It doesn’t matter if you’re a year or a decade away from retirement.
Planning for retirement will always pay off!
Determine your financial needs
We know what you’re thinking – “Thank you, Captain Obvious!”
The first step in planning for retirement is to create some financial goals. How much money will you need to maintain your lifestyle?
Investigate whether you will be eligible for the pension. Research strategies you can implement now (e.g. investments, personal super contributions) that will pay dividends in the long run.
Pro tip: You don’t need to see an accountant to start planning for retirement. There are countless online calculators to help you to understand your money. We love this tool from Sunsuper!
Reduce your debt
It goes without saying that the less debt you carry into retirement, the better. While you are working, avoid relying on credit cards or taking out high-interest loans. Planning for retirement is made easier when you are relatively debt-free.
As many of us know, wiping out debt can be easier said than done – you need to be strategic! Don’t just throw the same amount of money at each debt every month – this will extend the amount of time it takes you to get rid of each, and will mean that you are paying more interest to more places! Instead:
- Make a list ordering your debts from smallest to largest
- Designate a fixed amount to contribute toward clearing these balances every month. Make this amount the minimum payment on each of your debts, except the smallest one.
- Dedicate every spare cent of your remaining finances toward paying of the lowest debt.
- Once you clear your first debt, keep paying the minimum payment amount on all of your larger debts, except the one with the next-lowest balance.
This technique will allow you to clear out the number of debts you are paying back faster. The less number of debts you have, the less interest you are paying, and the faster you will pay off all of your debts in the long run.
Prepare your relationship
Another aspect of planning for retirement that people often take for granted is the extra leisure time they will spend with their partner. After working for years, it’s exciting to finally be able to enjoy each other’s presence again! However, the constant contact with a significant other can lead some to feel suffocated.
Many of us grow accustomed to having separate pursuits from our partner, and need to maintain some independence in order to keep our sense of individuality. This can become difficult when you do every activity together! As such, it is important to keep the lines of communication between you and your partner open. While planning for retirement, talk about how you will balance your needs for time together and time apart.
Being open about your desire for independence will avoid conflict in the future!
Set retirement goals
No more work sounds glorious to most of us in theory. But in practice you may find yourself feeling unsatisfied. Work provides us with a purpose – without this, it becomes easy to slip into the Post-Retirement Blues.
It is important to stay active after retirement and to set some goals. Do you want to become more involved in the community? Perhaps you want to join the four wheel drive club? Or even spend more time getting the garden up to scratch?
While planning for retirement, be sure to map out where you will find fulfillment in your life – whether this means becoming more involved in your local RSL or simply sipping tea and reading the newspaper!
Don’t save every experience for retirement
Nobody knows what is around the corner.
Many of us have a bucket list two metres long that we promise ourselves we will get to once we don’t have to work anymore. Travel, learning an instrument, finally sitting down to watch all of the Lord of the Rings movies. There is something that we are all putting off!
Activity planning for retirement is exciting – but don’t delay everything. You only have one life to live, and you never know how your circumstances may change in the future.
Don’t wait until retirement to start living – if you see an opportunity, take it.
The Clarity Road Team
