THERE are a number of questions that everyone should ask themselves as they approach retirement, but perhaps the most important of these is: “How much super is enough to retire comfortably?”
Financial planners have been arguing for decades over how much money the average person or couple needs for retirement.
Some recommend that retirees who are aged 55-years and older should be saving at least 30 per cent of their annual income each year.
And while younger employees may not spend too much time pondering what will happen when they leave the labour force, there is no harm in planning ahead.
Ian Ritchie, financial adviser for Ritchie Advice, says younger generations should start saving early to harness the benefits of compound interest.
“Planning ahead for retirement gives you the power to decide when and how you will retire and doing so when you are healthy and independent will help to ensure you make well-informed decisions,” he said.
“Importantly, having your own budget in place will give you the best chance of achieving the financial security and lifestyle you would like in the years ahead.”
Before plans are made official, Mr Ritchie recommends people review their financial circumstances, including whether they are eligible for an age pension or part-age pension.
“It is also wise to consider what you will do once you retire, how long you will be able to live on your savings and whether or not you will consider part-time work before retiring permanently,” he said.
“Your superannuation fund will be able to discuss with you the effect of working part-time might have on your superannuation benefits and how your taxation and superannuation interests will be affected by the decisions you make.”
Mr Ritchie said retirement planning should include both financial and lifestyle issues.
“Things don’t always go as planned, but if you put as much effort into enjoying your retirement as you have all the years you have been working and saving for it, then it will be a fulfilling one,” he said.
If you have any questions or wish to look at your own superannuation position contact Ritchie Advice today for an obligation-free first interview by phoning 6234 1488.
This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances.
Ritchie Advice Pty Ltd ABN 12 150 128 448, is a Corporate Authorised Representative 408050 of Dover Financial Advisers Pty Ltd, Australian Financial Services Licensee No. 307248.