There are a fair few strategies that we’ll be able to use immediately with most of our new clients to help achieve their retirement goals.
I’ve just had my first child just before I turn 30.
My father was 30 when I was born and his father was 30 when he had him. Based on this anecdote let’s assume the average 50-year-old has 80-year-old parents and 20-year-old children.
Out of these three, I believe that the average 50-year-old is in the toughest spot.
“Each generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after.”
George Orwell said that in 1945. It was true then, is now and will probably always be true.
My parents have always said to me, they plan to spend their last dollar on the day they die.
Before I was their financial adviser, I didn’t give this much thought.
Retirement is a concept many people struggle to visualise on a day-to-day level, especially when planning years (or even decades) in advance.
When talking to people about their financial situation, I often hear ‘I need to look at this more often’. But I’m not sure that’s the answer. Some people may need to spend more time working on their financial situation, but I think for most people it’s just a matter of using the time they already spend focusing on the right things.
In preparing for retirement, a common strategy is to downsize the family home to a smaller and lower cost home. By selling and purchasing a lower cost, smaller house, and pocketing perhaps $100,000 to put into your superannuation, you could benefit from drawing an additional income of circa $8,000 pa. in retirement.
A major part of pre-retirement planning is focused on growing or increasing retirement savings using available cash flow. Two of the main ways to do this include paying down debt, or contributing to superannuation. To compare these properly we need to look at all of the factors that will affect this decision, such as:
One of the first questions a financial planner will usually ask is: what are your priorities? Now, this is one of those questions that is well meaning but ultimately useless… unless it’s followed up with a simple test. Let me explain.
Turning 55 isn’t all bad. During our 50′s our earning capacity is often greater as experience has paid off with that long deserved promotion. Expenses generally decrease as well as children finish school and the mortgage reduces or is even paid off. The typical budget of someone in their 50′s is therefore often very different from someone in their 30′s or 40′s.
Dallas Davison, Michael Hogue and Ali Hogue.