The perennial question for most people is how much money they will spend in retirement and will they have enough money to meet that wish list of things to do in retirement.
Research shows that most people need about 65% of their pre-retirement income. However, some people may want more if they plan to have extensive holidays or want to fulfill their long-term dreams of a small business or hobby.
Make a List
I would suggest that you should start with a list of activities, writing down the “MUST DO”, noting the estimated cost and for how long you will maintain these activities.
From my experience, I find many people don’t prepare for how they will fill in their days after they have fully retired. Fortunately, there are plenty of websites to help you figure it out. New Retirement has a list of 120 suggestions. I believe the first 10 suggestions will give you food for thoughts. They are:
- Do what makes you happy
- See the world or your corner of it
- Become an entrepreneur
- Head to summer camp
- Don’t retire, take a sabbatical instead
- Relocate seasonally
- Grow a garden
- Write a book
- Become a teacher or tutor with online courses
- Volunteer for worthy causes
There is an increasing trend for people to ease into retirement by reducing their working days. This provides much needed financial support for some and allow you to ease into all those new activities and create a new circle of friends outside of the workplace.
MoneySmart
The government’s MoneySmart website provides valuable unbiased information regarding how much you are likely to need in retirement and the sources of retirement income.
They also provide a detailed Retirement Planner Calculator.
Seek Professional Advice from a Financial Adviser
Before you retire, consider consulting a Financial Adviser to ensure that your assets are employed effectively in retirement. The FAAA (Financial Advice Association Australia) provides a list of financial advisers in your area.
Do it yourself – with Financial Mappers
I would always recommend that anyone approaching retirement should have at leave one consultation with an adviser.
However, if you are the kind of person who prefers ‘to do your own thing’, then Financial Mappers may be an alternative solution. The software does not give financial advice like a financial adviser, but it does allow you to use cashflow modelling software to:
- Allocate how much you want to spend over different time periods in your retirement years.
- Drawdown Superannuation and other assets as a layered income stream.
- Discover how you may draw income from your investments.
- If you do have multiple investments, including superannuation, you can customize in detail how and when you will access funds from each of them over time.
Want to see how it works, watch this video, Manage My Income in Retirement.
Glenis Phillips SF Fin – Designer of Financial Mappers and Advice Online
Disclaimer: Financial Mappers does not have an Australian Services License, does not offer financial planning advice, and does not recommend financial products.
