Planning for a retirement of choice

If you’re over 50 and contemplating retirement, then this tip is for you…

Take this simple test to calculate the funds and assets you are likely to need to achieve the retirement lifestyle of YOUR choice.

As another financial year-end approaches, now is the time to put in place a plan with regard to achieving your retirement goals. Of course your financial adviser can assist you in preparing an appropriate plan for your set of circumstances, but based on three general rules of thumb, why not first take a moment to gauge if your current financial position will allow you the lifestyle of your choosing in retirement.

General Rule #1:
In retirement you will need to earn around 2/3 of your pre-retirement income (or incomes if you are a couple who both work) to maintain your current lifestyle.

Simply put, if you currently earn $150,000 in total, as a gauge you will need $100,000 in retirement to maintain your current lifestyle. This is assuming you are debt free of course.

General Rule #2:
To work out the total value of investable funds you will need by retirement to fund this annual income, multiply the figure from #1 rule ie $100,000, by 20.

Why 20? This is a factor equivalent to earning an average 5 percent return on your investment. This average is based on long-term historical trends.

This figure of $100,000 multiplied by 20 indicates that you will need approximately $2,000,000 in funds at your date of retirement.

Surprised or shocked?

This therefore bodes the question: Do I have enough invested?

General Rule #3:
Did you know that it takes approximately SEVEN years for your assets to double-in value assuming that they are prudently invested? This suggests that your money demands time to grow in order for you to continue your current lifestyle in retirement.

Do the maths. If you don’t think you have enough invested, now is the time to see your financial adviser who can help you put a plan in place. Without appropriate planning, you may have to work longer to amass the funds and assets you’ll need in retirement. Or you could be forced to compromise on the type of retirement you aspired to, finding yourself foregoing some of life’s luxuries and/or eroding your Estate plan and the legacy you’d hoped to leave to those you love.

We invite you to contact us for assistance in calculating the funds and assets you’ll need to afford the retirement lifestyle of YOUR choice. Plus we offer you the opportunity to visualise the growth of your financial pathway as you head towards retirement using our unique UlitmateGoal financial planning tool.

Call our team on 07 3251 3200 and allow your money the time it needs to grow.

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  • Values-based financial planning.
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  • Tax-effective strategies.
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  • Retirement planning.
  • Estate planning.
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