Many Australian retirees worry a lot about money, especially when it comes to having a decent living in retirement. It might be challenging to know how to get the most out of your retirement assets, given the rising cost of living and the present state of the economy. Fortunately, there are many strategies to ensure that retirement funds go further, from making the best investment decisions to utilising government assistance.
Three Financial Planning Best Practices for Retirees
Retirement is a long-term financial objective that requires years of preparation and saving. It’s crucial for retirees to be informed of some of the best practices for managing their funds as retirement draws near. Retirement-age workers run the risk of outliving their savings or becoming unduly dependent on social security payments if they don’t make a proper strategy.
Here are some essential financial planning best practices for retirees to think about, according to Mike Sikar of Australian financial advisory firm Delta Financial Group.
- Determine what successful retirement looks like
Asking when retirement can be afforded is crucial to planning as it should tell the would-be retiree how much exactly to prepare. Most people plan for retirement without knowing what a successful version of it looks like so they end up underprepared. Quality of life varies from person to person so a blanket retirement fund must not be set for everyone. Chances are, whatever needs and luxuries a person is indulging in during his 50s will still be the things he will be looking for after retirement. Some also double down on their hobbies as soon as they vacate the hours that used to be for work. Does a successful retirement involve lots of traveling and eating out? Does it entail relocating to another country? It depends on the individual, but the target retirement fund should reflect his preferences. This is in line with the S.M.A.R.T. principle of setting a goal. Clarifying what successful retirement looks like for a person will help him with setting a specific, measurable, attainable, realistic, and time-bound goal.
Picking up from the goal-setting method, the realism of retirement is also often misconstrued. People think they are going to live for a couple of decades, at most, after retirement, so they prepare funds just enough for that. Statistics say that there is a 50% chance that a member of a couple aged 60 will live past the age of 90, and the current life expectancy for men is roughly around 84 years old, and for women, it’s 87 years old. This means that people do not prepare for at least the last 25 years of their lives, which creates all sorts of problems for them and their family members.
- Do not let the abundance of options scare you
There are countless investment options today and it can be daunting to make the right choice when it comes to the vehicles that will make or break a retirement plan. There is also a seemingly daily supply of news about people who lost their life savings because of an investment scam. This leads to either analysis paralysis or procrastination, which, at the of the day, will not do any good for retirement planning. In fact, the longer that someone waits before investing for retirement, the less money they will end up with. Remember that when not invested, the buying power of money decreases because of inflation.
However, to help retail investors in navigating the abundance of options, financial planners have devised strategies and structures to increase the client’s control over their investments.
At this stage in your life, you don’t want your investments to be derailed by external market factors which are out of your control.
Investing your money across multiple different asset classes—shares, property, bonds, cash—will help to lower your investment risk. This strategy—diversification—works because different investment types perform well at different times so if one area of your portfolio falls, another may be rising. Having a variety of investments helps balance out your overall risk.
Having a trusted financial adviser, like those provided by Delta Financial Group, who understands a client’s financial strategy will make a world of difference in the person’s confidence, which is crucial in the proper execution of an investment strategy.
- Early succession planning is key to a peaceful retirement
Their own welfare is not the only worry of retirees. Most people overlook the fact that their assets will be left to their children when they pass away, so they do not do anything to make sure this process goes without a hitch. It catches them off-guard when the problem presents itself while they are still living as their children discuss, often not peacefully, who gets what, especially for families with an unbalanced distribution of financial capacity among the siblings.
All parents should address succession planning to ensure their loved ones have access to appropriate financial assistance, educational opportunities, and anything else they might need to ensure their quality of life continues when they’re no longer around.
At a minimum, every parent with adult children should have a current will to distribute estate assets, an enduring power of attorney to cover situations where they’re unable to make financial decisions themselves, and appropriate estate planning arrangements to distribute specific assets that are not covered by the will such as superannuation benefits, life insurance proceeds, and assets held in the family trust.
Not worrying about money is one thing, but not worrying about the family’s future is another.
Delta Financial Group: A Trusted Source for Financial Planning
Delta Financial Group provides financial planning services, specialising in retirement planning and superannuation. The company applies relevant financial insights to its clients’ overall situation and finds opportunities to improve it, making Delta Financial Group a reliable partner for financial planning. Clients who have tried their services and benefited from its expertise claim that working with them is like having their own personal chief financial officer.
They help busy professionals, IT specialists, and entrepreneurs 5 to 15 years away from retirement to create an income for life. They act as a sounding board, helping clients evaluate their options and make smart financial decisions to enjoy a better quality of life.
About Mike Sikar
Mike Sikar is the Founder and Principal Financial Adviser of Delta Financial Group, a rapidly-growing and innovative financial advisory firm that empowers Australians to make smart choices with their money. Sikar has over 25 years of wealth management experience in stockbroking and financial planning, founding Delta Financial Group in 2011.
His primary focus is investment advising and share-market education on an extensive range of investments both domestically and internationally. Sikar has a unique and broad skill set where he delivers informed, strategic and holistic financial advice aligned with personal and financial goals.
Delta Financial Group’s contact information
Email address: email@example.com
Phone number (02) 9327 4338
Mike Sikar’s contact information