Your Money
Money tip #12 – retirement planning
by Peter Switzer
Retirement, unfortunately, isn’t as simple as quitting your job, packing up your belongings and spending the rest of your days on a beach drinking from a coconut. If you want to ensure you have enough money in the bank to live comfortably after the daily slog is behind you, you will have to do a considerable amount of planning.
When planning for retirement work out how much you’ll need to live the lifestyle to which you’ve become accustomed. Perhaps you want to travel, explore and relax – find out how much you will need for this. The experts estimate a retiree will need approximately 75 per cent of their annual income each year to live comfortably. Another number bandied about is $1 million – but, of course, such a concrete number really depends on who you are and how you spend.
The next big consideration is what your retirement goals are. For example, your retirement goal may be to maintain your current standard of living or to be debt-free by the time of your retirement. Or, like I said, it might be to travel or even to take the grandkids out for regular outings.
To recap, the three big questions to ask when planning for retirement are:
- How much savings do I need for retirement?
- How much can I spend in retirement?
- And, depending on the answers to the above, when can I retire?
Answer these as best you can and you’ve made the first step in developing a realistic plan for retirement. Then, put your plan into action!
Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Published on: Friday, January 06, 2012
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