Retirement planning does not need to start with complicated projections. It starts with a few clear questions about your lifestyle, assets, risk appetite and values.
1. Do you know what retirement will cost?
Estimate your likely annual spending, including essentials, lifestyle costs and irregular expenses such as travel, home maintenance or helping family.
Your spending may change over time – often higher early in retirement, lower in the middle years, and potentially higher later if health/ aged care costs arise.
2. Do you know how much capital you may need?
Once you know your expected spending, you can estimate the capital needed to support it.
A simple starting point is to divide your annual spending by a withdrawal rate. But the right rate depends on your age, home ownership, Age Pension eligibility, investment strategy and spending flexibility.
3. Have you planned for a poor start to retirement?
A market downturn early in retirement can be more damaging than one later, because you may need to draw on investments while values are low.
Holding some cash, keeping discretionary spending flexible and reviewing withdrawal strategies after major market falls can help manage this sequencing risk.
4. Is your risk appetite reflected in your asset allocation?
Your mix of growth and defensive assets should reflect the risk you are genuinely comfortable accepting – not just the return you would like. If you’ve been disengaged with your super fund, you’re probably in the default ‘Balanced’ fund (or similar). Is this the right risk level for you?
Ask yourself whether you could stay invested through a significant market fall. Too little risk can leave your savings exposed to inflation; too much can make it difficult to remain committed when markets fall.
5. Does your portfolio reflect your values?
Consider whether your investments align with your ethics. This may mean avoiding certain industries, favouring companies with strong environmental or social practices, or investing to create positive impact.
Ethical investing can allow you to invest in line with your values while keeping the portfolio diversified and suited to your retirement needs.
Retirement planning is not about finding one perfect number. It is about understanding your spending, risks, values and the trade-offs you are willing to make.
Why professional advice matters
While online forums and calculators can offer general guidance, your retirement journey is unique. We can provide you with personalised strategies to maximise your retirement income, minimise tax, and give you peace of mind for decades to come.
Ready to get answers to your retirement questions?
Contact us today to start planning a retirement you can truly enjoy. Phone 08 9322 1110.
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