Investment decisions are naturally an essential component of any retirement planning. Although, it is often overlooked as to how best to withdraw funds from your nest egg once you retire, and especially what kind of retirement lifestyle you wish to achieve.
Noted below are our top 4 tips to help your plan for your retirement:
1. Know how much income you will need.
This is a key item although often overlooked by many. Having a sound knowledge of how much income you will need in retirement will assist greatly in your retirement planning decision. If you think you will need income of $80,000 per year in retirement, then prove it! This means structuring your financial affairs before you retire to live-off this level of income – after all, it’s hard to go back to work once you’ve retired.
2. Understand your entitlements.
There are several taxation and social security entitlements afforded to retirees. It is critical that you understand your entitlements to these benefits (and the risks associated with these being available) when formulating your retirement plans.
3. Quantify your “bucket list”.
Most people have a list of items that they would like to do once retired. Whether these items be to travel, purchase a new car, renovate the house etc. it is essential to quantify the financial implications of achieving the items from your “bucket list”, as well as having the capital allocated to these items in the early stages of your retirement.
4. Invest for the long-term.
Once retired, the temptation when it comes to investing is to remove all investment market risk and be reactive in periods of investment market volatility. However, for the majority of retirees, the investment time-horizon is 20+ years.