Are you or your parent’s one of the “baby boomer” generation?  The baby boomer generation is growing older, and creating a pension boomer problem for the Government. Increasingly, the State is going to excuse itself from its obligations, and baby boomers as well as the generations to come are going to have to look after themselves in their old age.As a result, retirement is going to be your single largest milestone in your life, one that without proper planning could well become a millstone.

Here are eight things you are going to have to consider:

  1. At what age will you retire? If there are two of you, then will one continue to work longer?
  2. At what age do you anticipate you may die, and if there are two of you, how long will the other survive you?
  3. What is your intention regarding the passing on of assets? Is what you have accumulated for you to consume, or do you intend to pass some of your assets onto others?
  4. What is your risk profile?
  5. Do you want to live off the income from your assets or are you prepared to sell down your assets over time? What eligibility do you have for pensions and government assistance?
  6. What level of assistance is your family going to provide you in your retirement?
  7. How healthy will you be in the future, what are the likely illnesses you will suffer from, and how will you pay for medical treatment?
  8. Do you have a formal plan of action for all of the above?

Create a retirement plan

Here are some outcomes you should plan for: 

  1. Working part time after ‘retirement’. Transitioning your job into a part time job. For instance, can you teach what you do, consult/troubleshoot or take on short term projects? Do you need training for the next step in your career? Having a single breadwinner in the family. Living more simply with less debt. Considering two incomes, with one for expenses and one for investing.
  2. Deciding if you need to sell some of your assets to live off. Considering means testing and what implications it will have on your capital. Considering alternative ways of helping your children or grandchildren, like sponsoring private or tertiary education instead of “leaving them the house”.
  3. With lower rates of returns now being offered on many investments, do you need to be more aggressive and take on more risk to achieve an investment income you want? Will you be prepared for a lower rate of return with less risk?
  4. Will you downsize your house for something more manageable? Will there be money left over after the sale to invest for income? Do you have anything else you want to sell? Is the income generated of more value to you (and even your family’s inheritance) than keeping the asset intact?
  5. Determine what sort of money you will be getting weekly from your superannuation or government pension. Are there other types of assistance you will be eligible for?
  6. How needy of your family’s involvement will you be? Will you want to live with them? Will you need nursing or financial help from them?
  7. Will you be close by for them to visit you? How can you ensure your interaction with your family is a pleasure for them, and not a chore?
  8. Is your health being maintained, or is it going downhill? Can you slow or even stop a worsening illness? Would more exercise today mean more mobility tomorrow – or are you going to be one of these people who never go out because you are too stiff and sore to leave your comfy chair? What are the implications of you being sick to do housework, or to feed and care for yourself? How can you plan to make this as easy as possible?
  9. Have you talked to someone about this? At Milestone Direct, we consider retirement planning one of our most important jobs.

Have you started to make plans for your retirement? We’d love to hear what you’re doing in this area of your finances.

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Vinessa is passionate about assisting clients to achieve their financial goals. This passion, combined with specialist financial qualifications, and years of work and life experience makes her eminently qualified for advising families and individuals on the most appropriate way to protect assets and build wealth. Vinessa is married to Graham and together they have two boys and one daughter, Marc, Liam and Olivia. Disclosure and Disclaimer: A disclosure statement is available on request and free of charge. While every care has been taken to supply accurate information, errors and omissions may occur. Accordingly, Milestone Direct Ltd accepts no responsibility for any loss caused as a result of any person relying on the information supplied

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