Have you ever thought about how you want to spend your retirement?
It may seem like a long time from now, but it is inevitable. Preparing early, then, is the smart choice. You need to be financially ready for it so start planning your retirement as early as now. There are plenty of things you need to consider before you make this important life decision. Let this guide help you out.
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Transitioning into Retirement
Retirement is a significant milestone in any person’s life. It marks our passage from a life full of responsibility and hard work to one where you can just kick back and relax to a worry-less day. You can start enjoying leisurely activities without worrying about deadlines. You can socialise with your mates without worrying about boardroom meetings. You can even take on extended vacations without worrying about office evaluations. Ah, the perks of retirement outweigh the demands of work life.
But before you submit your papers for retirement, there are two factors to consider.
First, your age. Australians enjoy the freedom to determine their age of retirement. You can work for as long as you want and you can retire as early as you like. Retiring early means that you can live your life and determine your fate the way you want to. You will be able to see what the world has to offer while you are still young with plenty of time to take risks and recover from mishaps. Retiring late means that you will have more time to plan and save up for it, making you more financially stable once you’re a retiree.
And that brings us to the next factor, your financial situation. According to the Association of Superannuation Funds of Australia (ASFA)’s Retirement Standard of 2021, if you want to be comfortably retired by the age of 65, you will need an annual budget of $44,818 if you’re single, and $63,352 if you have a partner. A little more than half of those are covered by your full age pension rates, which are paid by the government.
Managing your Retirement
It’s time to take control of retirement by following a Transition to Retirement strategy. A good Transition to Retirement strategy should help you shift smoothly to your retirement years while helping you attain early retirement benefits.
You will have three sources of income during your retirement years: your investments and savings, your superannuation, and, lastly, government benefits.
Investments, properties, and savings
If you have shares of stocks or have properties that you have started investing in before retirement, now is the time to cash them in. You can sell your stocks and you use your investment properties. The money in your savings account or time deposit account can likewise be helpful to your retirement cache.
Superannuation is a restricted fund that you can only access once you retire. This is another reason why the retirement age is important as you can only start accessing your super once you have reached the preservation age of 55 to 60. A good thing about super is that you can have several super accounts.
There are a number of government benefits that can be considerable sources of your retirement income. Once you are aged 65 to 67, you can be eligible for Age Pension. It can be full or partial depending on your assets and income during employment. Other government benefits include Carer’s Allowance, Disability Support Pension, Commonwealth Seniors Health Card, and Concession Cards.
Imagine the possibilities! Together we can create a bright financial future for you and your loved ones.