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Retirement is a milestone many of us look forward to, but it also brings along a set of financial considerations on how to spend wisely to make sure your retirement plan doesn’t outlast your savings.
The size of Australia’s total superannuation assets was around $3.54 trillion in the June 2023 quarter report, up 7.6% from the year before, according to the industry regulator the Australian Prudential Regulation Authority (APRA).
But even with a booming superannuation sector, everyone’s individual super balance will be different depending on what you’ve been able to save on the road to retirement. How much you’ll need in retirement also depends on many personal factors, including whether you’re single or part of a retired couple.
For example, couples targeting a comfortable retirement at age 67 should aim for approximately $690,000 in retirement savings, while singles should target around $595,000, says research by the Association of Superannuation Funds of Australia (ASFA).
While these figures are just estimates, they can provide useful benchmarks for your retirement.
That’s why planning for your retirement spending is essential to help ensure financial security once you step away from the workforce. Whether you’re nearing retirement or you’ve already retired, strategic planning can help you retire with some confidence.
How to start planning for retirement?
If planning for your retirement sounds daunting, here are a few tips that could help.
Create a retirement budget
If you want to know how much you’ll need when you retire then you need to have an idea of the things that will cost you money. That’s why it’s a good idea to create your own retirement budget.
Start by categorising the essential expenses you’ll face, such as for housing, healthcare, utilities and groceries. Then, allocate funds for discretionary spending, such as travel and leisure.
A well-structured budget acts as a financial roadmap that can help guide your spending decisions and prevent overspending. It empowers you to take control and identify areas where any expenses may be minimised.
For instance, if healthcare costs loom large, you may be able to explore any government-issued concession cards, such as the Low Income Health Care Card or the Commonwealth Seniors Card.
These cards offer discounts and benefits that can ease the financial burden. By incorporating these concessions into any planning, you can optimise resources for a secure retirement.
This is an extract from an article written by Matthew Huang of Active Super for Canstar, published on 30th October 2023.
Read the full story: 5 practical steps to start your retirement planning - Canstar
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