“How much do I need to retire?”
It’s one of the questions we hear most often, and understandably so. When you’ve spent years working, paying down the mortgage and building your super, you want to know whether you’ll have enough to take the next step.
The answer is different for everyone. Even two couples with similar savings can have quite different retirement plans, depending on how they want to live, the expenses ahead of them and where their income will come from.
That’s why we start with a conversation about you.
- What do you want to do in retirement?
- What would a comfortable lifestyle look like?
- And what would you like the freedom to say yes to?
Once we understand that, we can work back to what you’ll need to fund it.
What does retirement look like for you?
For some people, retirement means spending more time at home, enjoying the garden and seeing the grandchildren. For others, it means regular travel, time for that hobby you’ve always wanted to start or finally getting around to the renovations they’ve been talking about for years.
There’s no right answer. But getting specific helps turn a broad idea of “having enough” into something we can plan for.
We’ll talk about your everyday expenses, as well as the things that make life enjoyable. Meals out, weekends away, club memberships, and activities/hobbies all deserve a place in the conversation.
Looking at what you spend now is a useful starting point. From there, we consider what might change when you stop working. Some costs may fall, while others may increase as you have more time to do the things you enjoy.
Look beyond your regular spending
A well designed retirement budget needs to allow for more than the bills that arrive each month.
You might want to replace your car, upgrade the kitchen, or take an overseas holiday. There may be family occasions to travel for, or people you’d like to help financially.
These expenses can be easy to overlook because they don’t happen every year. But they still need to be funded.
Separating your regular living costs from larger, occasional expenses gives us a clearer picture of what you’ll need and when. It also helps you see how a big purchase could affect the rest of your plan.
The aim is to make room for the things that matter to you, with an understanding of what you can comfortably afford.
Where will your retirement income come from?
Your super balance is an important part of the picture, but it may not be the whole picture.
Depending on your circumstances, your retirement funding might come from superannuation, savings, investments, or a combination of these. Government benefits, such as the Age Pension, may also supplement your income if you’re eligible.
We consider these sources together, including when they may become available and how they could support your spending over time.
This is why comparing your super balance with someone else’s rarely tells you much. Their expenses, assets, retirement timing, and eligibility for benefits may be quite different from yours.
Bring it all together in a retirement plan
Once we understand your lifestyle goals, expected expenses, and financial position, we can illustrate how the pieces fit together. Our retirement planning process is designed to help you see what your retirement could look like financially and explore the choices available to you.
For example, what might change if you retire a year earlier? Reduce your working hours first? Bring forward a major holiday or delay a renovation?
Projections help us explore these questions. They rely on assumptions and as we know life is unpredictable and things can change, so they aren’t a promise of exactly what will happen. Their value is in helping you understand the possible outcomes and make decisions with a clearer view of the trade-offs.
A retirement plan also needs to evolve. Your priorities, circumstances, and spending can change, so reviewing the plan helps keep it relevant to the life you’re living.
You don’t need all the answers to get started
You might have a retirement date in mind, or you might simply be wondering whether it’s becoming a realistic option.
Either way, you don’t need a fully formed vision or a particular savings balance before having the conversation.
Start with what you’d like life to look like. We can help you work through the numbers, understand your options and build a plan around what matters to you.
Wondering how much you’ll need to retire? Book a call with Connie and start with the life you want.