How to create a retirement plan that works for you

What are you planning for your retirement? Mimosas on the beach? Soaking up the sights on hikes? Spending as much time as possible with your family? Finally reading that book you’ve had on your bedside table for the last 2 years? Becoming a competitive Irish dancer? Whatever you want to do, having a solid retirement plan will help ensure you can dive confidently into that new lifestyle.

What do you really want in retirement?

Figuring out what kind of lifestyle you want and how much it’s going to cost is the first step of building a dream life for yourself. Whether you want a tree-change or a sea-change or no change, creating a Retirement Plan to help maintain that lifestyle will include a lot of financial planning and budgeting. Your super, any excess funds from your home if you’ve sold or are selling, Government benefits like the pension, any savings or debts, and any investments will all need to be considered, alongside your expected living expenses, including the good stuff, like hobbies and holidays.

What’s your timeline?

You’ve been working hard for your whole life, it’s time to reap the rewards. Figuring out exactly when you want to transition from work to play permanently will help structure the rest of your planning. Your financial situation, along with your health, employment, and loved ones will all play a part in deciding when you retire.

Where will you live?

There’s no place like home, wherever that might end up being. Where are you going to live once you’re retired - or even in pre-retirement? Whether you want to stay in your current home, downsize to somewhere like a Lifestyle Community (we think this one is a great idea), or go off the grid and live in a hut in the mountains, knowing where you’re heading and what you’re planning for is important. If you’re taking the downsizing leap, you’ll need time to go through your storage and belongings and declutter. If you’re taking the ‘hut in the woods’ option, you’ll need time to stock up on bug spray and canned beans. Lock in wherever home sweet home is going to be, so you can plan appropriately.

Wait, did you say pre-retirement?

We did! Pre-retirement is that golden period when retirement is on the horizon, but you’re not quite ready for it. You could still be working full time, or you may begin transitioning to part time work in preparation to retire, but if you’ve started considering retiring, then welcome to your Pre-Retirement era.

The Big Move isn’t just for full retirement, many people are taking a partial step towards retirement and moving whilst they’re still in the workforce. Selling your home whilst you’re still working means you can take advantage of the downsizer contribution options to top up your super, along with minimizing your bills and maximizing your free time. It also means that when you do fully retire, you don’t have to stress about moving, because you’ll already be settled and living it up. Many people move to a Lifestyle Community in pre-retirement, to start enjoying the resort lifestyle and amazing amenities as soon as they can. We get it, coming home from a hard day's work to have a quick game of bocce, a soak in the spa, and then popping out for a delicious dinner at one of the local restaurants on your doorstep sounds like heaven.

Let’s talk super

If retirement is feeling like a “sooner rather than later” plan, you should consider if your basic contributions to your super fund are getting you where you need to be financially. If you’re eligible, one way to top up your super is the Downsizer Contribution, where eligible people who sell their home to downsize can put up to $300,000 into their super.

Other ways to pump up your super are by entering into a salary sacrifice arrangement with your employer or making additional personal super contributions. Remember that there’s a limit to how much you can contribute to your super each year, and putting in too much could result in extra tax.

We recommend talking to a financial adviser about your personal financial circumstances, as it can help navigate the financial labyrinth of retirement planning and finances with confidence.

Retirement income

There are a few things you should take into consideration regarding your potential income streams during retirement.

• Will you be receiving a pension?
  If you’re eligible, this Government benefit could contribute up to $967 a fortnight to your finances.
• Do you have existing investments, or should you make some?
  If you have an investment property, stocks, bonds, or any other form of income, consider their health and longevity. If you don’t have any, consider if you want some.
• If you’re downsizing, how much extra income will that create?
  Moving from a large family home to a smaller property means it’s very likely that you’ll have a chunk of money available after the dust settles. Estimating how much you’d like your home to sell for, and how much you’re expecting to pay for a new one is an important consideration.
• Do you have any debts that will need to be paid?
  It’s a good idea to try and clear any debts before you leave the workforce, so you can go into retirement in the financial green.
• What’s your financial backup plan?
  If everything goes A-over-T, having a safety net will be essential.

Create a retirement plan document

After considering all this information, putting it in one document will make life easier. It’ll be a breeze to track your progress towards retirement, and to routinely review your plans and goals. It’s also easier to see if this is a retirement plan that works for you and is based solely around what you want.

At the end of the day, the most important part of the retirement plan is that it’s showing you a future you want to see. Making sure you’re ticking off your goals, and are happy with your progress and the future you’re creating are invaluable. Setting yourself up for success so you can kick back and relax in your retirement is the best gift you could give yourself.

If you’d like to do that well deserved relaxing amongst world class amenities in a safe, beautifully maintained neighbourhood, Lifestyle Communities® might be the perfect place for you to downsize to. You can free up additional funds in your budget by paying no council rates, water rates, or stamp duty, and by keeping bills low with energy efficient appliances and sustainable features throughout every Lifestyle Community. That means more funds, more time, and more luxury living. Come see for yourself.