5 tips on planning for retirement

Most Australians will live at least 25 years in retirement, so it’s important to have a plan to support ourselves financially during that time. Rob Weston, Head of Financial Planning & Advice at Chelsea Wealth, shares some insights that may help you to start planning for life after paid work.

The earlier you start planning for retirement the better.

According to the Australian Bureau of Statistics, the average age that people plan to retire is 65 years. At the same time, the average life expectancy in Australia is among the highest in the world, stretching well into the 80s. That means we need to plan for at least 25 years in retirement. That’s a long time to be relying on your own resources.

According to Rob Weston, Head of Financial Planning & Advice at Chelsea Wealth, it’s never too late to start thinking about your retirement strategy. However, starting early gives you more time to plan.

“Time allows you to put strategies in place to grow your nest egg and improve your situation for retirement. The more time you have, the more options you have,” he said.

We asked Rob to share some insights into planning for retirement. Here are his top tips to get you started:

1. Understand when you would like to retire.

It’s easy to cruise along, thinking you’ll know when the time comes to retire. However, if you think now about when you’d probably like to retire, it puts you in a better position to plan for it and make it happen.

2. Understand what plans and goals you have in retirement.

“We tend to see that people retire and in the first couple of years, they are ticking off those big ticket items – caravanning around Australia or traveling through Europe,” says Rob, noting that this means people spend a lot of money in the first three to five years of retirement, on items such as a new car or caravan, or renovating the house.

“Then things settle into the day-to-day. I encourage people to think about the day-to-day because if you are going from a full-time work week to suddenly being in full-time retirement, instead of having two days a week that you’ve got to entertain yourself, you’ve now got seven. So, what are you going to do? It’s different for everybody. Some people spend a lot of time volunteering, other people have grandkids they want to help with, some continually travel, and others are happy pottering in the garden. You’ve got to think about what you want and plan for it. Remember, you work hard to get to retirement, so you want to enjoy it when you get there.”

3. Do a stock take.

Rob recommends going through all the assets and liabilities you’ve accumulated over the years to understand your current financial position. Have a look on the Australian Tax Office portal and understand where your superannuation is. There is more than $16 billion dollars in lost and unclaimed super in Australia.

“Particularly if have not been a police officer all of your life, and have worked in a few other industries before joining the force, you’re likely to have a few other super funds,” said Rob. “Many people have also accumulated shares over the years, whether they have proactively purchased them or benefited from the Telstra or NRMA share offers. If you are going to be applying for Centrelink or Aged Pension, you need to understand what we’ve got. Also, your assets may help fund a caravanning trip or other big expenditure.”

And if your total assets don’t have you on track for the retirement you want, you can begin to develop strategies to change that.

4. Hold the mirror up to yourself and have an honest assessment of your investment experience over your lifetime.

“Have you invested in shares or property, how did you feel about all of those and how long did you invest for? If you consult a financial adviser about your retirement plan, they will talk to you about investing in the market,” Rob said. “They will want to make sure you are invested in a way that gives you the best returns over a long time. So, it’s good to think about how comfortable you are investing in different types of assets.”

5. Take the time to find a financial planner that you connect with and trust.

A financial adviser can offer expert advice on strategies to grow your wealth for retirement. Rob recommends taking the time to talk to a few different advisers before committing.

“Spend the time getting to know your adviser – understand their experience, their qualifications, if they have specific areas of expertise they gravitate towards and whether that fits with what you are looking for,” Rob said.

“Chelsea Wealth is a great match for people from the police community looking for retirement advice because we have experience providing advice around all aspects of life in the police force. For officers who are eligible for the NSW Police Defined Benefit Scheme or those participating in the Optional disengagement scheme, be sure to seek out an adviser who has experience in this area, which can be quite complex.”

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Chelsea Wealth Management Pty Ltd ABN 75 112 845 673 AFS representative number 1286091 (Chelsea Wealth) is a subsidiary of Police Bank. Chelsea Wealth is a Corporate Authorised Representative of Matrix Planning Solutions Limited (Matrix) ABN 45 087 470 200 AFSL No. 238256. Chelsea Wealth is authorised to provide personal financial product advice to retail clients. In referring members to Chelsea Wealth Management, Police Bank does not accept liability or responsibility for any act or omission or advice provided by Matrix or Chelsea (or any of their representatives). The information on this website is general in nature and may not be relevant to your individual circumstances.