Planning for life beyond the 9 to 5 should be one of our main priorities when we start earning an income through our jobs. But most of us save this for later and put it on last on our priority list. It is something that most people later do in life (generally, too late). If you came across this blog hoping to start planning your retirement for the years to come, you’re in the right place. Like all of the new chapters in your life, a plan can go a long way in ensuring that you are emotionally and financially prepared for the journey ahead.
We help individuals who are interested and ready to commit to turning their financial life around and plan for a better financial future.

How retirement has changed

Retirement is not what it used to be. With medical advances and healthier lifestyles, this means that Australians are living much longer than previous generations and enjoying more years in retirement, as shown in the following diagram. In our grandparents’ day, retirement was short, and expectations were modest. Now we are enjoying longer and more active retirements than ever before.

As life expectancy increases, your retirement savings may need to last for up to 30 years or more. Earlier in the more active phase of retirement, you may need more money for discretionary spending on travel and new hobbies. Later on, you may need to spend more on health costs and aged care. You may also need to think about the legacy you plan to leave to your family.

When do you want to retire?

You can retire whenever you want to. The retirement age in Australia is not set in stone. However, your health, financial situation, employment opportunities, individual preferences, Superannuation, your plans and partner’s needs play a huge part in determining whether you’ll continue working or opt for retirement.

As more people blur the line between working and retiring, the concept of retirement is changing. A lot of people are taking advantage of flexible work options to transition into full retirement over several years and enjoy more time for leisure, travel, hobbies, volunteering and family.

We all have different plans for retirement but whatever your goals are it is important to try and ensure that you have clearly defined your goals. For example, instead of saying, “My goal is to retire when I have enough money to live comfortably.” try to be less vague and try to be more specific, something like this: “My goal is to retire when I have an income of $60, 000 per annum, indexed to inflation, to at least until age 90.”

How much will I need to live a comfortable retirement?

The amount that you need to be able to live a comfortable retirement may vary for your lifestyle. But ASFA provided us with an estimate of Superannuation balance of $640,000 for couples and $545,000 for singles to live a comfortable retirement, assuming you withdraw your super as a lump sum and receive a part of Age Pension. ASFA defines a comfortable retirement when a retiree can enjoy a variety of recreational activities, buy household goods, and pay for top-level private health insurance, a mid-range car, electronic equipment and occasional travel.

If your definition of a comfortable retirement is aligned with ASFA’s then, their estimate may work for you. If not, how much Super you may need to sustain your standard of living varies according to your lifestyle and your maintenance needs.

Addressing ‘The Gap’

Before you can address ‘The Gap’, you need to know what is.

The gap is the difference between the estimated size of your nest egg at the time of your retirement and how much money you think you’ll need. The earlier you identify the gap, the more informed you are to make wise decisions when dealing with any issues.

Keep in mind that you should also include all your assets that will be available at the time of your retirement such as investment properties, cash and term deposits. ‘The Gap’ is not just the value of your super, and you should also deduct any loans you may have to repay.

Building your savings for retirement

There are a lot of ways to build savings for retirement, but superannuation is generally the best way to do this. With the potential tax advantages, government incentives and opportunities, no wonder Aussies find saving via super the most efficient way to build their savings for retirement.

There are several strategies to optimize your Superannuation. Our strategies can save you thousands every year by reducing tax and fees. Combined with enhancing investment performance and a contribution strategy, this can add hundreds of thousands to your Superannuation over time.

Download the How to prepare your superannuation eBook to learn more strategies for boosting your super in preparation for retirement.

Seek professional advice

We stress the need of getting professional advice if you are considering any of these strategies as they are only effective when done correctly.

At Sheffield Financial Group we only work with clients who we can add significant value to. Our team of experts have successfully helped hundreds of clients optimize their Superannuation in preparation for retirement.

We are a leading Financial Planning company that specialises in helping our clients meet their financial goals. Our full-service team works with Australia’s leading financial providers to assist in providing the best strategies and products. Whether you are seeking retirement, Superannuation, or investment advice, our advisors provide a tailored & transparent solution based on your personal situation. Sheffield Financial gives you peace of mind knowing you have a team of experts looking out for your best interests.