This article is submitted to us by Dr. Nikola Djordjevic, MD. Dr. Djordjevic is a practicing physician who is the Co-Founder and Project Manager at MedAlertHelp.org, a site dedicated to improving your knowledge about health, nutrition, fitness, aging, retirement, and much more.
Did you know that in 2019, the number of Australians that planned on retiring in the next 12 months was 439,000? This indicates a significant difference from what we had in 2017 when the figure was pegged at 395,000. And what’s more disturbing is that most of these retirees don’t have already laid out plans on how to live their lives after retirement.
Planning for retirement can be quite challenging and intimidating if you do not have a proper understanding of how and what to expect. There are so many variables to consider that can make or mar your life after retiring. In the past, putting enough money aside for retirement sounded like a good idea. Yet, studies have shown that this is one of the most challenging tasks when planning for retirement.
This article will show you areas that you need to focus on as you plan to retire so that you can have a successful retirement.
Start Planning on Time
One mistake often made by retirees is late planning. Irrespective of how much money you make, early planning and regular follow up on your retirement plans is key to securing a comfortable life after retirement.
Cultivate the Habit of Saving
The truth is, in retirement, you need all the money you can lay your hands on. So the sooner you start saving, the better your chances of accumulating a reasonable sum, especially if your income falls under the middle or lower class.
If you already have a retirement savings plan, try to increase your contributions to the maximum amount possible. Most of these retirement plans have special offers that only apply to maximum contributors.
Know Your Retirement Needs
Another mistake that is commonly carried out by retirees is the inability to create and work under a retirement budget. Most retirees come into retirement, living life and spending money the same way they did in their active working days. Over time, this approach proves to be a wrong one because it makes you consume a large part, if not all, of your retirement savings not long after retiring.
That is why it is essential for you to create a retirement budget and stick to it. Analyze your lifestyle and eliminate unnecessary expenses where possible.
Understand How Superannuation Works
In Australia, almost every working citizen will at some point come across the term “superannuation.” Superannuation, otherwise known as a “super” is a partly mandatory system that allows you to save a minimum amount of your income into a form of wallet that serves to cater to your financial needs after retirement. To grow your balance, this money is invested in a number of assets, this way you get to obtain maximum value for your savings.
There are various types of superannuation funds, such as Corporate funds and Industry Super funds. Having a good understanding of these various types will aid you in selecting the type that suits you best.
Investments are one sure way to guarantee you’d enjoy your retirement. It allows you to earn while in retirement. Unfortunately, only a few retirees think through this route. Although investment requires some special skills, you need to know what to invest in and how much you are willing to put into the business.
Also, you must diversify as much as you can if it does not affect your budget and your other businesses. The reason for diversification is that it provides you with options to increase your income and also reduce risk as returns from one industry can easily cover for the downfall of another business.
Know Your Likely Retirement Income
Check your savings, social security, employer pensions, wages, and any other source to determine your retirement income. This should give you clarity about what you are retiring with, and help you make adjustments where necessary to sustain yourself in the long run.
According to the Association of Superannuation Funds of Australia (ASFA), the estimated funds an individual and a couple would need to retire to ensure a comfortable life are $545,000 and $640,000, respectively.
Purchase a Long Term Medical Insurance
As you grow older, you will most likely be faced with health challenges that you did not bargain for. A long term insurance plan can help cover these unforeseen health issues. The Australian healthcare system is funded by a combination of government funding (through the Medicare scheme) and private health insurance.
Private health insurance is something most Australians look into for increased choices regarding their health, as it covers hospital treatment, general treatment, and ambulance. This article provides you with the top 10 private health insurance companies in Australia according to their respective market share
So if you already have a savings account to cover your health in retirement, do make sure to put in reasonable contributions. Your health is your wealth.
Plan Where to Live out Your Retirement
It is necessary to carry out appropriate research on where to retire, as migrating from one location to another after retirement can be not only frustrating but also costly. A number of factors come into consideration in deciding the perfect place to retire, and they include a reduced cost of living, accessible transport facilities, and optimal climate, amongst others.
Some of the perfect locations to retire in Australia include Sunshine Coast located in Queensland and Echuca in Victoria.
In Australia, retirement is a significant issue as the expected retirement age, which was 62 years, is now reduced to 58 years. Despite the many challenges that might come with retirement, putting the right things in place before retiring can help you build a comfortable retirement life.
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