Author: Michelle Griffiths, Partner, TAG Financial Services
2020 has impacted all our lives in various ways – you may have planned a holiday that’s been cancelled, have less income coming in than expected, a vacant rental property, be working from home and/or home schooling. These changes combined with market uncertainty may have made you doubt your planned retirement date.
Do you have enough money to retire?
Your biggest risk in retirement is not losing your money, it is outliving your money. To fully understand this, you need to have a good understanding of:
- How much money you will have when you retire? Take into consideration;
– superannuation
– investments
– savings
– inheritance
– age pension
– assest/liabilities - How much you will spend, including;
– day to day expenses
– holidays
– cars
– renovations
– gifts to children that you have planned
At TAG, we use a projections tool to work this out. We input your current financial situation and project your future income, assets, and expenditure.
Consider this example
Bob and Jane, both 57 would like to retire now. Their situation is as follows:
- No mortgage
- Super worth $650,000
- Desire an income of $50,000 per annum in retirement
- Want an annual holiday of $20,000 pa for the next 10 years
- Would like to renovate their home for $50,000
- Gift $100,000 to children in a few years’ time
Based on this information, our wealth projections tool shows their money would run out when they are 82.
Therefore, they probably cannot retire right now. So, what can Bob and Jane do to change this? If they move their retirement age from 57 to 61, our wealth projections tool shows their money running out when they are 101.
An extra 4 years of working has a significant impact. This small change makes all the difference and will give them peace of mind for their future. An alternative option would be to spend a little less or reduce the “gift” planned to the children.
By planning for the future now, it allows you to gain a clearer understanding of the choices you have and they impact they will have.
Knowing how these changes might affect the long-term picture will help you make better decisions.
Planning is Key
Spending some time planning will make a big difference to your retirement. A solid plan gives you clear direction and results.
When planning, it is important to first consider what age you would like to retire, and if there is a possibility of transitioning into retirement. This along with all your financial considerations (as listed at the beginning of this article) will give you a solid foundation to plan your retirement.
Get Advice
Some people are confident to do this on their own, but we have found that most people who are financially content and successful, get professional advice. If you have the right adviser, who takes an interest in you and your family’s needs and provides you with quality advice, then your chances of achieving financial security increases dramatically.
“TAG has given us direction and confidence for our financial future. They cater to all levels of financial knowledge and help you see that financial security is easier than you might think. We love the security of their counsel.” – Wendy from Ashwood
At TAG we don’t believe in magical investment formulas. What we offer is quality advice and support to reach your financial goals. We work with you, for you.
What Should You Do Now?
Watch Our Video
Our ‘Roadmap to Financial Success’ video, highlights the importance of understanding how you are financially positioned, so you can make an informed retirement choice.
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Meet with us
If you would like to discuss your retirement options, we offer a 1 hour no obligation, complimentary consultation with one of our advisers to discuss your situation. Contact us to arrange a time.
Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).