While you should always talk to someone who is a qualified financial planner, these handy tips should prepare you for a meeting with your financial planner and help you decide what questions or problems you may face.
1. Determine net worth
You need to calculate your net worth. This includes thinking about housing, mortgages, shares and other assets that you own. Ideally, this number will be a positive number, but don’t worry if it is negative: knowing this before you enter retirement is far better than discovering this out much later.
2. Figure out expenditures
Start making a detailed account of your expenditures, even the little things like coffee. It is very important to understand where your money is going and what income you have, so that you can start to decide how much money you will need in retirement to maintain your lifestyle.
3. Look at the companies you do business with
Look at what you are spending your money on. Too often once we have joined a bank or an organisation we are content to stick to the one plan, but if we shopped around we could find better plans. Sometimes though you are rewarded for your loyalty and if you simply ask the company you are with they may change your paln. Look at what you are spending and when especially with phone, electricity and water bills and see if you can find a plan better suited to your needs that will save you money.
4. Start saving
Slowly start saving. Start a small term deposit and start putting away a little money each week. If it is in a good account you will earn interest, accumulating and helping you to grow your wealth bit by bit.
6. Get your mortgage under control
If you have a mortgage or a loan, before you retire is the time to get it under control. Gathering and implementing information that can help with your mortgage repayments is of paramount importance to control your outgoings. We will be writing a future guide on mortgages to give specific ideas on how to do this.
7. Increase your super contribution
See if you are able to increase the amount of super that you contribute out of your pay. You can increase this slowly and you may not even realise the difference in your pay, but you will be thankful when you retire.
As we have seen lately, the marketplace is unstable. Therefore, it is not always a great idea to invest all your money in one asset class. It is best to distribute your wealth between a variety of stable assets such as property, shares, international shares, commodities (e.g. gold).
9. Think about retirement
Consider how you would like to retire. Perhaps you would like to move into a retirement home or over-fifties village. Perhaps you would like to stay at home. Either way you will need to consider the cost associated with either one of these options. What home maintenance costs will you face? Will you face costs associated with public transport or your car? If you are moving to a retirement village, then what are the costs that are associated with that village, and any future moves? Answering these questions will help you make the decision that is right for you.
10. Prepare for unexpected expenses
As much as we do not like to condor or think about them often we or our partner may have unexpected health related expenses, see what is covered by the government, but have a fund set aside for emergencies and lifestyle changes that may be unexpected.
11. Think about expenses luxury
While this article is mostly about scrimping and saving, retirement can and is great fun! Be sure to set aside some money for luxuries. Nice dinners, shows with friends, holidays and family holidays. Enjoy your retirement you have worked hard, so leave enough in your budget to enjoy retirement.
12. Stop working gradually
If you cannot afford to stop working straight away, find a way to do it gradually. Many employers will offer flexible working conditions which will help you transition to retirement. Even if you are well prepared for retirement, easing into retirement can work well. You have worked your whole life and will probably miss what you do! Moving gradually into retirement will mean that you can have the best of both worlds.