forward360

CLOSE

Will I Have Enough Money to Live on When I Retire?

By Simon Cooper
February 24, 2020

There are things that keep us up at night during different phases of our lives. We worry about school, jobs, kids and, eventually, retirement. Sooner or later, the question on everyone’s mind is whether or not they can live comfortably when they leave the workforce for good. It’s never too early or too late to start thinking about your retirement. 

Ah, the magic question. Not only is this answer different for everyone, but it also is a bit of a moving target. What might seem like enough when you’re 50 might not seem sufficient as you cultivate hobbies, grow your family or your health changes. There is a school of thought that says you’ll need between 70-80 percent of your pre-retirement income to live comfortably once you retire. We think that’s a fine benchmark but the actual number is far more complicated.

What Will Your Expenses Be?

You need to gain a realistic idea of what your retirement expenses will be. Will your mortgage be paid off? Are you going to sell your house and downsize? Do you have big plans for retirement, or do you want to slow down and just enjoy a leisurely pace? There are a ton of factors to consider when you start estimating your expenses. Your financial planner will help you think through these line items.

Don’t let expenses sneak up on you. As you’re collaborating with your financial advisor, take your time on this part and be realistic when you’re estimating. Don’t assume your entertainment budget of $200 a month will decrease when you don’t have work to occupy all your time. Other expenses to consider:

• Mortgage Car payments
• Insurance Utilities
• Food
• Hobbies
• Travel
• Gifts
• Charitable gifts
• Entertainment
• Healthcare

Everyone will have specific expenses others may not have, so the most important thing is to make this as personal and accurate as possible. This is a part of your financial picture that you’ll revisit over the years as you get closer to the big day. Speaking of the big day, don’t forget big family expenses you might take on like paying for a wedding or helping kids buy a house.

How Do You Want Your Life to Change?

This requires some thought and it will change as you age. At 30, you may think you’ll need to be on the

run all the time, buying a new car each year. At 40, maybe your kids are young and you just want to sleep when you retire. At 50, you’re probably settling into the hobbies that make you happy, friends that are on the same timeline and you know, at least at a high level, what you want your retirement to look like.

Are you going to stay in the same geographic area? If there are places you’ve always considered living, start your research now. What will the cost of living be compared to where you currently are? Will you need extra money budgeted for travelling back to visit friends and family? Big life changes aren’t unusual after retirement because people get to live out the dreams they couldn’t when they worked full time.

What Will You “Do”?

We see ourselves sleeping in every day, catching up on all the books we meant to read and watching the sunset every night. That’s living the dream for some people and they’ll be happy doing that forever. For others, it gets old after a month or two. Will retirement be the time you give your small business idea a real shot? Will you go back to school or take specialised training?

Talk with your spouse and family about your ideas for retirement and start thinking of the ways you’ll fill your days. If you’re making a change that you’ll need to fund, you’ll have to make it part of your plan. You’d be surprised how many people start successful businesses after they retire, many of them opening non-profits or other labours of love because they finally have time to do what they always dreamed.

When Will You Retire?

Your time horizon makes a big difference in retirement strategies and how your money needs to work for you. Not being able to decide when to retire is a fairly common occurrence and that can have a big impact on your financial situation and overall fiscal plan. Working closely with a financial advisor and getting their advice on strategy and investment recommendations can help you form a clearer plan with more defined timelines.

What Are My Options?

This is the good news. There are a lot of options to get you where you want to be, but you may want the advice of a professional along the way. Investment waters can get muddied and confusing. There are several factors that need to be considered as you decide on your retirement strategy and there are many paths and tools to get you to your endpoint.

At Forward360, we can help with all aspects of your financial life. We can prepare you to have the kind of retirement you’ve always hope for. We know it’s not just about investments, though that’s a big part of it. We understand that if we save you money in taxes, it’s no different than making money in investments. When we can do both, you’re closer to your goals.

MAXIMISING YOUR SUPER

The legislation around superannuation is complex and ever-changing. We help you navigate one of the most effective ways of saving for your retirement.

TAX MINIMISATION STRATEGIES

We combine our top-notch financial planning advice with our strong accounting and tax law knowledge. Understanding business, capital gains and personal tax helps us provide superior financial advice.”

PERSONAL INSURANCE

There are several insurance products that can safeguard your income in the event of injury and illness. We can help protect your family should the worst happen.

PORTFOLIO MANAGEMENT

We’ll make sure you’re diversified so you can weather the storms of a volatile market. We help with your share portfolio, managed funds, real estate and lifetime annuities.

The Answers Are Out There
While there is no magic number for how much money everyone will need in retirement to live comfortably, there is a magic number for you. The important thing is working with someone who is as dedicated to finding that number as you are and who has the knowledge to help you get there

When you work with Forward360, you’re working with some of Australia’s top financial advisors. We offer a free consultation to get you on the road to financial freedom in retirement. After your consultation, we discover everything we can about your finances, then work to understand your goals. From there we develop and present your personalised plan. When we agree on the right plan, you sit back while we implement it. We’ll manage and monitor your plan and course-correct when necessary to keep up with your fluid and changing priorities.

No matter where you are in your life, your retirement is always in your future. We take the responsibility for our part in your future very seriously. When you’re successful, we’ve done our job. We look forward to helping you be wildly successful.

Simon Cooper

Managing Director

Financial Advisor. Entrepreneur. Co-founder and managing directory at Forward360, Simon ensures all clients get the financial advice they need to reach and exceed their financial goals — both personal and business.

Get our best strategies, tools, and support sent straight to your inbox

This field is for validation purposes and should be left unchanged.