Like they say: There are two certain things in life – taxes and getting old. Fortunately for us, life expectancy has grown rapidly in recent decades. In fact, Australia holds 8th place in the world for longevity. In 2022 Australians have an average life expectancy of almost 84 years. The United Nations expects this number to continue increasing in the coming years with 0.18% per year:
According to the Australian Bureau of Statistics, the average age of retirement in the last five years in Australia was 62.9 years (with 63.6 for men and 62.1 for women). If we combine these two data we will come to the logical conclusion that each of us will have some 20 to 30 years at least of living as retirees. While this is great news, this also means that you have to prepare wisely for the “golden years of your life”.
There are two important things to do when planning for your retirement:
- Start as early in your life as possible;
- Find a trusted financial adviser to help you.
The former is logical – the earlier you start with your retirement savings, the stronger the compounding factor will be. Said simply – your money will have more time to work for you.
Finding a trusted financial planner is something many tend to overlook, or at least omit to do especially in our early years. This however is usually a costly mistake. Case in point: have you heard about:
- How much super will you need when your retire?
- When can you access your super account?
- Details about COVID related early access to your super account
- What is the maximum amount of tax-free super re-contribution?
- What is the First Home Super Saver Scheme and how can you save on taxes and contribute to your real-estate purchase?
The list of similar important questions is rather long. And the above 5 have had some considerable and important changes made in the past couple of years. If you do not have an immediate and precise answer to all five questions, it is reasonable to turn to a professional financial adviser for assistance with your financial planning.
You can only build a future with your local financial adviser for a secure retirement. Here is a detailed break-down of each and every word of this statement (and the title of this article):
Create A Retirement Future
When we are young many consider that retirement is too far away and there is enough time to prepare later on in life. This is probably one of the worst thoughts you can have. Early retirement planning actually creates the retirement future, for you to enjoy one day.
The word “future” is also important here. According to ASFA (Association of Superannuation Funds of Australia), many still reach retirement age without sufficient super funds at their disposal. The reason for this is that the compulsory super system is still relatively new. As many as one in 4 men and one in 3 women report that currently, they do NOT have ANY superannuation savings. Hence many will depend only on the Age Pension when they retire. Without guided support from a dedicated retirement planning consultant, you may well have fallen behind the average for the country.
Your first job is to “create” and then to build up your “retirement future”. Or rather a future that you wish to enjoy once you retire.
Local Financial Adviser
By now you should be relatively convinced that a sound retirement plan is possible only with the aid of professional superannuation consultants. What is also important, however, is that you have a local retirement planner. This means that if you live in Brisbane North the best results you are likely to get are actually from a wealth management company in Brisbane North. Certainly, you can go for an international wealth consultant (PWC, Deloitte and the like) who will be large and extremely professional. Or you may opt for a retirement consultant with national coverage. These will have a wide sweep of offices across Australia. However, it will be the local wealth management company, which will know exactly what is applicable to you.
Your retirement savings are dependent not only on the amount that you are able to save. What is important is that you make your contributions wisely. Discuss with your local financial planner how and when you can save money on your mortgage. You may actually be eligible to slash up to 15 years off your mortgage payments! Or learn how to optimize your taxes using your retirement savings. Tax optimization is not only “for the rich”. All of us may benefit. You may be eligible to save up to AUD 10 000 per year of taxes! Such questions may only be properly addressed by a local financial planner, who is prepared to advise you along the way to building and executing your retirement strategy. Just like the GP, this is not an international doctor or a national expert. It is a local personal financial planner.
Ensuring A Secure Retirement
The word “secure” means that you will have sufficient retirement funds to continue to enjoy life in your retirement years. Sure, you may not need to buy a new house. Or actually, you may also prefer to downgrade. Certainly enjoying life will mean different things to different people. However, it will be quite specific for you. Whether you will want to travel the globe or retire in a small cottage in the bush is up to you. Upon inception, you and your retirement planner will have to draw up the ideal retirement landscape in your case. Knowing where you want to go, your financial adviser will be able to draft your retirement strategy. Then all you have to do is follow the blueprint.
Now you know the “why” and the “how” retirement planners can facilitate your stress-free and comfortable retirement years. What is left for you is to carefully pick the “who”, or your trusted financial planner and start preparing for your retirement years.