What to Consider When Planning for Your Retirement

Sources of income

The primary sources of income retirees might receive during retirement are:

• Social Security
• Employer-sponsored retirement plans, such as pension plans
• Income from personal savings
• Investment income, including allocated pensions
• Wages from part-time employment

Estimate the amount of income you might expect to receive from each source - and for how many years.

A budget

Set-up a budget for your living expenses. How will you spend your retirement years? Will you travel? Move to another state? Take up a hobby? No matter how you decide to spend those years, you may want to create a budget.

Establish an emergency fund

If you have not done so, consider an emergency savings account for potential unforeseen crises.

Examine your superannuation investment choice

A good practice is to consistently meet with your financial planner to review your asset allocation strategy. Is it still the right strategy?

A financial planner will work with you to help you allocate your portfolio based on your objectives and risk tolerance. You should consider your age, the assets you've accumulated, time horizon (years until retirement), risk tolerance and other important factors when creating your portfolio strategy. Although asset allocation and diversification can help mitigate the effects of market fluctuation, it cannot ensure a profit or guarantee against a loss.

Consider your superannuation options

Subject to your superannuation fund having the flexibility you may consider one or a combination of the following

• Transition to Retirement Pension. Commencing a pre-retirement non-commutable Allocated Pension may assist you to build your retirement nest egg. It can also allow you to change from full-time employment to part-time employment if a change in life-style is being considered before retirement

• Make Salary Sacrifice contributions. This can assist in tax effectively building your nest egg. There can be taxation savings generated using this method of making additional contributions

• Consolidate your various superannuation benefits. There may be benefits in bringing various superannuation benefits accumulated over the years into your primary employer superannuation fund. Some research needs to be completed to ensure there are no penalties or extra costs to do so.

Plan ahead for long-term care

Have you thought about the level of medical attention you might need in the event you require long-term care in the future? It is a good time to review your Health Insurance and ensure the benefit plan you have will serve you well into the long-term

Evaluate your life insurance needs

Do you currently have a life insurance policy? A review of your insurance should be undertaken. This should consider what amount of insurance should be maintained as this is an increasing cost, as we get older. It may be that current levels of insurance are now higher than required as your financial asset base grows.

Develop an estate plan

If you haven't already done so, you may want to think about establishing an estate plan. A well-constructed estate plan can give you the peace of mind to know that your hard earned assets pass to the right people at the right time.