As an Adviser the most common question I get asked is “How much do I need to retire?” This is normally followed by, “When should I start planning for my retirement?”
The first question isn’t such an easy one to answer. How much you need is dependent on your goals, your desired level of income in retirement, and multiple other factors which is not as simple as stating a dollar figure. This can only truly be determined by completing a thorough retirement plan.
The real question to ask is how you envision spending your retirement. For many, this is not that easy to answer either. While we know we want to retire and we may even know at what age, we do not have a clear and detailed vision of our ideal retirement. If you take money out of the equation, ask yourself what you envision your retirement to look like and when would you retire. This is different for everyone.
So how confident are you that your retirement will be the one you envisioned?
Investment Manager, Vanguard, recently completed its inaugural How Australia Retires study, having a financial plan and access to advice are the main drivers of confidence among Australians in retirement.
Vanguard Australia’s Managing Director, Daniel Shrimski, said – “One of the key findings in this report is that having a plan is one of the most effective ways to not only achieve a successful retirement but to alleviate the emotional burdens and anxieties that Australians can feel towards retiring.”
The second question then – when should I start planning?, is a question much easier to answer. The answer is Now. The sooner you start taking action to build your future financial security the higher the likelihood of achieving the retirement of your dreams.
The Vanguard study found from the participants surveyed that those who had sought professional advice were about 20% more confident that they would be able to fund the lifestyle they want in retirement. Furthermore, 50% of participants who have not had financial advice were either not confident or only slightly confident they would reach the retirement lifestyle they wanted.
Why is this?
Having a plan helps to find a balance and awareness when it comes to money. Through the advice process, you will obtain a more detailed understanding of your vision. When building wealth for retirement, a financial plan does not just look at savings. In the advice development process, your adviser will consider any given number of potential strategies to determine which will benefit you in achieving your vision. Having a holistic financial plan will provide confidence in your decision-making and prioritise your vision, by taking more purposeful action to prepare for retirement.
If you are considering a retirement plan, contact our office to arrange an appointment today.
Katrina Dhu (MFinPlan, GradDipFinPlanC, DFS(FP), ADFS[FP]) is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.
Any information provided to you was purely factual in nature. It has not been taken into account your personal objectives, situation or needs. The information is objectively ascertainable and is not intended to imply any recommendation or opinion about a financial product. This does not constitute financial product advice under the Corporations Act 2001 (Cth). It is recommended that you obtain financial product advice before making any decision on a financial product such as a decision to purchase or invest in a financial product. Please contact us if you would like to obtain financial product advice.