Retirement is a time to finally savour the fruits of your hard work, travel, enjoy your hobbies and relish well-earned moments of tranquility.
Whether you are five years away from it or 15, you need to have a plan for retirement in place that covers your living arrangements, finances and lifestyle goals.
The following tips will help you put together your retirement essentials strategy.
Retirement Essentials: How to plan for retirement
- Grow your retirement nest egg(s)
One of the fundamental pillars of a comfortable retirement is financial security. Start by assessing your current financial situation and consult with a financial planner, accountant or Self Managed Super Fund (SMSF) specialist to determine the amount of money you need to step away from work and afford your desired lifestyle.
As you approach retirement, start thinking about taking advantage of salary sacrifice options and contributing to your superannuation fund. This strategy can be tax deductible, and your super growth should compound to give you a larger amount when you are ready to step away from the workforce.
One strategy to grow your wealth as you work towards retirement is to downsize from the family home. Invest the proceeds in super (this can be a good strategy to reduce tax if you are over the age of 55 thanks to the downsizer super contribution scheme), or use the funds to purchase two smaller properties; one to live in and one to lease.
Explore additional opportunities to grow your funds through investments and tax deductions with the help of a financial professional. Aim to diversify your financial portfolio so all your financial ‘eggs’ aren’t in one basket.
- Update your accommodation
Your home plays a pivotal role in your plan for retiring, for financial and lifestyle reasons.
If you’re still living in the family home but your children have moved out, downsizing to an apartment, townhouse or retirement unit can release equity from your property so you have more financial flexibility as well as freedom from taking care of a larger home.
- Explore your passions
What will you do in retirement? Perhaps you don’t like the idea of being idle and would like to work part time or volunteer. Or you and your partner may wish to go caravanning as ‘grey nomads’.
There are so many organisations and activities for seniors. You can join your local Probus club to enjoy adventures with other retirees, drop in at your local community centre or visit the Men’s Shed in your area. If there is nothing that suits you, think about starting a club or group yourself.
Make sure you are on the same page about what you want and start putting a plan in place. Having something to look forward to each day is another one of your retirement essentials.
- Think about the grandkids
Retiring may be the trigger to move closer to your adult children so you can support them and help to raise the next generation.
If this is the case, you will need to figure out your living arrangements. If it’s time to sell your home, you may as well aim to be within a few minutes of your family members so life is more convenient for everyone. Even if your grandchildren haven’t arrived yet, it can pay to think ahead. Can you purchase something now and lease it to Airbnb guests until you are ready to relocate? There are so many options.
You might also find the need to relocate applies to an elderly parent who needs more care. Moving closer to where they live can give you peace of mind.
- Prioritise your wellbeing
Doctors and medical practitioners start to feel like friends as you age. Support the good work they do by maintaining your exercise schedule, keeping up good dietary habits and asking questions about how to stay well in retirement. Put the groundwork in now and you will enjoy better health in the future.
- Start thinking about your legacy
Being clear about what you will leave behind is another retirement essential.
Retirement offers you a chance to reflect on your life's journey and create a legacy that resonates with your values. Consider how you want to leave your mark – be it through mentoring, philanthropy, or preserving family traditions. These pursuits can add a meaning to your retirement years.
The more thought you put into retirement before it happens, the more you will enjoy this time in your life. It’s never too early to start making plans for a happy, healthy time after you leave the workforce.