Investments - Pre-Retirees
Have you paid off all your debts?
At this time of your life you may be starting to look forward to retirement. Your children may have already left home and you may be starting to wind down your working career.
You may still have debts to pay such as your mortgage or other personal loans and as you move into part-time work or stop work altogether, it may be harder to your loans without a regular salary.
But when you're preparing for retirement, paying off debts becomes even more important. The fact is, Australians are living longer which means we'll need more money for our retirement.
By paying off our debts early, you'll have more money to contribute to your investments. this can be a tax effective strategy as the interest you pay on your mortgage isn't tax deductible but the interest you pay on an investment is. So by converting your non-deductible debt to deductible debt you can save money.
Here are some strategies you might want to think about at this stage of your life
- putting a robust transition to retirement plan in place
- consolidating accounts to reduce fees and take advantsge of compounding interest
- making sure your estate planning arrangements are in place, and
- putting in place a legacy plan if you're a family business owner.
Would you like to have the right safeguards in place to protect your retirement?
These days you can look forward to a longer retirement than ever before. Current life expectancy rates for both men and women are increasing
So while many of you may have planned for 20 years in retirement, there's a good chance your retirement will last 30 years or longer.
Add to this the impact of the GFC and it becomes clear many investors need to continue growing their super for much longer than they used to. But how do you keep growing your super without the risk of losing your nest egg?
There are solutions that allow to get the certainty you need to stay invested in the market by protecting your super from poor market performance and you can lock in your market gains along the way
Contact us to help you with your retirement savings strategy, we'd be happy to help
Is you financial plan up to date? What are you doing to reduce your exposure to financial risk?
The years leading up to and the beginning of retirement can be the best years of your life. You may be making plans to travel and spend money on your interests and hobbies. It's also a period of great change, which means it may be a good time to review your financial plan.
A key priority during this period is to understand how much you'll need for retirement and how much you currently have. Some questions to think about include:
- what age do you plan to retire?
- what sort of lifestyle do you want?
- have you paid off all your debts?
- do you have ageing parents or other family members who will be dependent on you?
- will you need extra money for other needs such as holidays and or a new car?
As a general rule of thumb, you'll need about 60% of your pre-retirement salary each year to fund a comfortable retirement.
As sound retirement plan is one of the best things you can do to prepare for retirement
As you get closer to retirement, your investment time horizon changes and market movements can have a greater effect. this s because your super balance is probably near its highest point and if your super balance falls at this stage, you may not have enough time before you retire to earn back those losses
There are a number of things you can do to prepare for retirement:
- reduce risk in your portfolio by increasing your investment in defensive assets such as term deposits
- increase super contributions (up to thresholds)
- diversify investments to spread risk
- consolidate accounts