As you approach retirement, it is a good idea to take stock of your finances and start making decision that will influence your future.
Ideally, retirement planning should be carried out as early as possible to maximise savings, but this is not possible for everyone.
Downsizing can be a good way of boosting your assets and maximising how much you have to live on during your post-work years – but in what ways can you downsize?
Address your mortgage
If you are still paying off a mortgage as you enter retirement, you might want to come up with a strategy that will help you clear it.
Mortgage payments will eat away at your retirement savings and at a time when your income is limited, this should be avoided at all costs.
The same can be said for any other debts you might have – pay them off sooner rather than later so they are no longer a burden once you retire.
Move to a smaller property
If your circumstances allow, it may be beneficial to move to a smaller property – this will help reduce your spending in all sorts of areas.
For example, your taxes will be lower, as will your insurance and day-to-day expenses such as utility bills.
Think about whether you could realistically manage in a more compact property and weigh up how much it will save you over a certain period – the figures will speak for themselves!
Reconsider the second car
Although it is not uncommon for households to have more than one car these days, retirement should be the perfect time to ask yourself whether you need a second vehicle.
Consider not only the running cost, but any other expenses that are associated with the car – if you can cope without then maybe it would be worthwhile putting the money towards something else.
Review your investments
During the transition to retirement, it is essential to take a look at your investments and determine whether they are working as hard as they possibly can.
Gaining super advice is also a good idea as this will help you assess how much money you will have to live off – in turn this can allow you to identify areas where cutbacks need to be made.
Failing to obtain this advice could put you in a financially vulnerable position when it comes to finishing work for the final time.
ipac is one of Australia’s largest financial advisory firms and has offices based across the country. A wholly-owned subsidiary of the AMP Group, ipac specialises in research and financial advice that helps clients lead happier, more fulfilling lives.