Even though the retirement age was drastically moved from where it was before, the fact is that in Australia the majority of people still retire between the ages of 55 and 64. This is mostly due to the fact that they want to embark on their retirement while they still have the energy and physical capability to pursue some of their dreams and ambitions. Some even go as far as to use their retirement fund to start a business of their own. Regardless of what your ambitions are, you won’t get far without adequate preparations. This is why you need to consider these five retirement tips.
How much money will you need?
The first issue that you need to tend to ahead of time is to determine just how much money you’ll need. The only way to get an accurate answer is to figure out what your retirement plans are. Some people just want to lead a quiet modest life and spend their last decades in peace. Others know that they’ll have to keep financially helping their family (children and grandchildren), which is why these people might need more funds than the first group does. Then, there’s the last group, the one that wants to go traveling, exploring and doing things that they never had the time to, even though they’ve always wanted it. Depending on your personal plans, you’ll have to make some realistic financial projections.
Think about where you want to live
The next thing you need to consider is the location and the accommodation that you want to live in. You see, while the idea of staying in your own home may seem quite logical (for practical and financial reasons), you need to understand that, at your old age, you might need some specialized care. Also, you should realize that, at the moment, chances are that your colleagues make up a sizable part of your daily social interactions and that you might be desperate for the company of your peers once you leave the job.
The location also matters quite a bit, which is why more and more retirees from NSW are interested in retirement villages in Central Coast. The city itself is an hour’s drive from both Sydney and Newcastle, and it is definitely one of the most beautiful retirement spots. The place itself is a perfect balance between affordability and a great lifestyle. Central Coast is a lot quieter and less hectic than Sydney, for example, and if you ever get nostalgic about life in a major metropolis, you can visit it in no time. These several reasons alone should be convincing enough.
You still have some tax obligations
The next thing you should know about is the fact that just because you’re in retirement (even full retirement), this doesn’t mean that you no longer have any tax obligations. Even withdrawals from a traditional 401(k) retirement plan will cause you to owe tax money. If you decide to start a business (something we’ve mentioned in the introduction), the situation will become even more complicated. Also, keep in mind that saving for your retirement is a must, seeing as how the social security system and pensions are nowhere near as reliable as they were supposed to be.
A low income is not an excuse
The most common excuse for not saving enough for the retirement is the idea that the income is too low for such a thing. There are always alternatives for you to consider, ranging from contributing to your IRA or the company retirement plan. Also, if you start early enough, make a realistic budget and cut back on your expenses, you would be surprised at just how attainable your budget loans could be. Lastly, you need to start working on your plans to improve your cash flow, even if it means finding a side-job.
Long-term care insurance
So far, we’ve only discussed the importance of a retirement plan; nonetheless, one thing that might have escaped your attention is the fact that as you get older, your health is bound to deteriorate. No, this is not being pessimistic; it’s what being a realist is like. Even if you’re doing everything right, with age, your bones and muscles will become less dense and your organism will weaken. Keep in mind that this is the best case scenario. Unfortunately, the older you are and the weaker your health is, the harder it will be to get decent health insurance. For this reason alone, you need to start thinking about this in time.
As you can see, the most important piece of advice that you could get on this topic is to start thinking about your retirement as early as possible. This way, you’ll have enough time to come up with the best solution and won’t have to settle for compromises. You should know what you want, need and expect. While all of this may sound a bit overwhelming, you must keep in mind that the actions and decisions you make now will impact the next several decades of your life.