Look I know thinking about retirement can seem as fun as watching paint dry, and that’s probably because it’s so far away, that thinking about it right now seems redundant, however, it’s extremely important and the best way to plan for a successful future is to take an active interest and start planning now.
Last week on Financial Freedom Friday, Jack spoke about the importance of planning your retirement because unlike our parents and grandparents generations, our retirement is no longer guaranteed, and although we have our super contributions, it’s more often not enough for s to retire comfortably on.
So here are 8 easy steps to plan for your retirement.
Step number 1 – Create your 10-year plan
Failure to plan is a plan for failure.
Without a plan, how do you know where you are going, or more importantly, how to get there.
It’s time to put pen to paper and create a blueprint for your next 10yrs. This should include what you want to achieve, what’s important to you and how you plan to go about achieving these goals.
So dream big!
Step number 2 – Assess your situation
Where are you right now at this very moment? Are you moving towards or away from your goals? If you are moving towards your goals, congratulations. Keep taking those everyday actions to ensure you achieve your goals. And continuously reassess your situation to ensure you stay on track.
If you are moving away from your goals, ask yourself, why is that? Be completely honest with yourself, this is the perfect time to reflect. And make the decision today. Is this important to you, and you will make this a priority.
Step number 3 – Identify your current sources of income
This goes without saying, but you need to know where your money is coming from and how much. Do you need more? Can you live on less and save the remainder? Knowing your numbers is key to real financial freedom. Ask any successful businessperson and they will tell you, if you don’t know your numbers, you don’t know your business.
Step number 4 – Consider your retirement goals
This is where you need to ask yourself “how much do I want to have in my retirement fund?” Here’s a simple exercise so get a pen and paper. How much money do you need to cover your costs on a weekly basis, and how much extra would you like to have to enjoy your retirement on a weekly basis? Let’s say your magic number is $1500 per week. Multiple by 52 weeks in a year and multiply again by how many years you plan on being retired. So for a retirement fund that you need to last you 20 years, and using the example of $1500 per week, you need $1,560,000.
Again, knowing your numbers is key.
Step number 5 – Set a target retirement age
Whether you want to retire at 65 or 35, having a target retirement age will help you get more specific about your retirement plan. The more specific you are, the more specific your plans. Which means the more specific and intentional are your actions towards this plan.
Step number 6 – Confront any shortfalls
Is there anything financially in your future that you need to consider for your retirement plan?
Are there any assets or liabilities you need to be aware of? Will your employment be affected in the future? Perhaps you want to help your children financially somehow?
Take this into account when calculating your magic retirement number so you are as prepared as possible. And when shortfalls do happen, you’ll be ready.
Step number 7 – Assess your risk tolerance
What degree of uncertainty are you willing to take to achieve potentially greater rewards? Is your tolerance low, that you’re happy to feed your superannuation over time? Or are you ready to make bold moves to safeguard and potentially fast track your retirement?
This will help you plan and understand the best way to utilize your money to help it grow.
And finally, step number 8 – Consult a financial advisor
A financial advisor is the very best person to help you make those important decisions about your financial future. They can guide you to the best products and practices so you can maximise your time and investments. Their goal is to help you put all the previous steps into actionable goals. So, you can secure the future you want not only for yourself, but also your family.
Start today with these small steps and I promise, your future self will thank you for it.
When considering an investment property with positive cashflow, it is important to make sure it is suitable to your specific financial goals and objectives. Remember to do your due diligence and if you need advice, JR Prosperity Partners can help you decide if this is the best strategy for you. Contact us today on 1300 522 562 or email: team@jrprosperity.com.au .
