Retirement planning for aged care is likely not a top priority for you right now. That is understandable, but you really should be taking measures today to ensure you can afford to retire and maintain your current lifestyle. It may not require a complete financial overhaul on your part, and some small changes can be implemented now to help you be in the right financial position when you decide to retire.
Tips for Preparing for Retirement
Here are a few tips to help you get there.
Tip #1- Understand Your Personal Finances
This is where it all starts – looking at what you currently have as cash flow and cash on hand. What you earn, spend, and cover debts with will help you make adjustments to assist with your long-term goals. A close look at your monthly financial activity may also identify areas where you can tighten your spending and use the difference to increase your savings.
Here is what you should examine:
- your current income
- your spending habits
- your debt-to-income ratio
- your credit score
- your monthly costs/subscriptions
- your superannuation contributions
Tip #2 – Build A Monthly Budget
One of the best ways to get a picture of where your income goes and how much is through a monthly budget. This will show you everything from daily to weekly, monthly, quarterly, and annual expenses. A budget can help you shave a little here and there to funnel into your retirement savings.
Tip #3 – Hire Professional Help
In this case, the professional should be a financial adviser, and the task you want to give them is to build your retirement plan. Although you could probably guess at your future financial income and expenses, a financial adviser can factor in all kinds of scenarios and still have a parachute option in place for you, if you need it. Doing this planning on your own is difficult and time-consuming. It is better to pay an expert on the subject to do the heavy lifting for you.
Tip #4 – Explore Different Financing Options
If it becomes clear that your Age Pension, superannuation, or savings will not be enough to permit you a comfortable retirement, you may have to turn to other financial options. A reverse mortgage is a popular choice for individuals 60 and older, as they do not require extra payments, which translates into more cash for you when you need it. There are pros and cons to this option that a financial adviser can discuss with you.
Tip #5 – Educate Yourself
Probably the best way to prepare for aged care and retirement is to do some homework. The more you know, the better decisions you can make. The more you know about your financial needs and what has to be in place for a good retirement plan, the more prepared you are. You should also study up on the policies in place for different age pensions and what aged care options are available to you where you live. Don’t forget that qualifying requirements, guidelines, regulations, and policies tend to change. Staying current with all of these details will help you make informed decisions when they count.
Tip #6 – Start Downsizing Today
There is a time when you should be reducing the amount of “stuff” you have. If you are closer to retirement age and have no children living at home, this could be the right time to start letting go of things that are possibly in the way or are no longer important in your life. Downsizing also allows you to make the transition into a smaller home, apartment, or condo much easier. Downsizing also reduces the work required if aged care includes moving into an assisted living facility later in life.
Lifestyle Advisers Can Help With Your Retirement Planning
Retirement and financial planning are processes. To be successful at it, you must start earlier rather than later to have a clear picture of what you have and need to eventually shift into a comfortable retirement. Retirement planning is not usually a do-it-yourself project, and a professional financial planner can guide you on the right path. For assistance with your retirement planning, contact Shylea Ulrick at Lifestyle Advisers today.
Conclusion
Although aged care and retirement planning may not be a high priority for you currently, the time is now to start preparing for that time in your life. The more prepared you are now, the better off you will be once you decide to stop working. There are several ways to get ready, and they include understanding your current cashflow situation, creating a budget, seeking financial planning assistance, exploring other financial options, educating yourself on regulations and guidelines, and downsizing. When you are better prepared for retirement, you can enjoy it more when you get there.
