Planning to retire? How much is in the 'tank'?
Written on the 29 April 2021 by Parkside InvestorPlus
As a professional financial planner, I wish I had that proverbial dollar for every time I've been asked at that proverbial BBQ how much do I need in my super to retire?
And even before I've had a chance to respond, the other person comes back with their take "I've heard you need a million dollars at least".
Now, depending on how I feel my response would one of two:
1. Yup, you're right
And hand on heart, it's not as simple as picking a nicely rounded number that everyone seems to home in on.
What determines when I can retire?
This again is one of those questions that comes with the response.it depends.
There are myriad articles on the web that address the topic of how much do I need in my super to retire and when can I retire so no point in repeating them here however, for those wanting to check out those resources, the links are included at the end of the article.
In Australian, there is no such thing as a 'retirement age'. Nor are there any laws that dictate when you can and must retire.
This means, you can retire when you want.
Having said this, statistics show that people, in general, choose to 'retire' between the ages of 62 and 65 presumably to allow them to live a quality level of life while still being mobile and healthy for some time to come.
So, what determines when people choose to retire? Some key considerations include:
The reality of retirement
The reality is that most individuals and couples are facing a shortfall in the superannuation balances compared to their retirement aspirations.
It's estimated that the average of life for women is 87.6 years and 84.9 years for men.
These numbers are quite important the implication is that women who have not worked or who have worked and have taken time out to raise the family may have to potentially fend for themselves once their partner passes.
So, in many cases, once retirement roles around, it's no surprise that many continue to keep working to bridge the shortfall in superannuation as best as they can which means working through until your late 60s and even early 70s.
How to prepare for your retirement
Again, there is no one size fits all formula to planning for your retirement.
However, there is one idiom that is truly relevant in this case you don't know what you don't know.
Everyone's circumstances are different, everyone's position in life is different and everyone's aspirations in retirement are different.
They say the best time to plant a tree was 20 years ago, the second-best time is NOW.
The time to start thinking and planning about retiring is now, regardless of where you are in your life stage the longer it's left unchecked, the more it's going to be an uphill struggle in retirement when in fact it should be easy and cruisy.
This means speaking with professionals who are in the know, who can advise you on the best course of action for you and your stage in life and who you can trust.
Retirement planning is not something you defer to the day before you retire it's a process that needs to start as early as possible in your life stage.
As promised, here are some excellent resources that delve deep into the numbers of retirement.
At Parkside InvestorPlus, we can help you align your aspirations and values with a financial plan so you can meet your retirement goals.
Author: Parkside InvestorPlus
About: As advisers, we act as a fiduciary sitting on the same side of the table as our clients, providing peace of mind, greater control and visibility.