When meeting with clients who are planning retirement, financial advisers often get asked this question – and there is no definite answer.
How long your money lasts depends on many factors: how much you have saved, what kind of retirement lifestyle you want to have, how much you spend during your golden years, and if you have any other retirement income streams available.
If you have planned to live a life of leisure by travelling the world on a luxury yacht but you have only saved $28,000 per year, you may want to reconsider your choices.
According to the Association of Superannuation Funds of Australia (ASFA) Retirement Standard, couples need $56,339 per year in order to live a comfortable retirement lifestyle.
ASFA’s definition of a ‘comfortable lifestyle’ means that a person is able to participate in a large range of recreational and leisure activities, whilst still maintaining a good standard of living.
One of the first and most important things that you must do when you are creating your retirement plan is to figure out what you would like to do once you reach your preservation age. This will then give you a savings benchmark to save towards.
Living with a limited income means that you need to be more cautious with your spending. You may find it extremely beneficial to sit down with a financial planner in order to create a comprehensive budget.
This way, you can monitor what you’re spending your money on, and how much, and cut down on excessive or unnecessary costs.
It’s also really important to make sure that you stick to your budget, so that you’re not overspending what you have allocated yourself.
You may even want to consider getting rid of any debt that you have in order to reduce the costs that you have during retirement. This might be mortgages, personal loans, student loans or hire purchases.
maintaining an income
Talk to a financial planner to find out how you can generate an income during your retirement years. Whether it’s through wages from a part time or casual job, receiving interest from investments and bonds, or receiving Centrelink benefits, you should discuss how it might impact your overall income and lifestyle.
we can help
If you are thinking about planning for your retirement, we can help. Why not get in touch by calling 1800 626 881 or by using the ‘contact us’ tool on our website.