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18 May 2022

Tips on How to Prepare Your Finances for Your Retirement


A significant challenge for people when planning for retirement is knowing how much money they need to save. This is different for everyone as it depends on your financial situation and ideal retirement lifestyle.

You may be wanting to achieve early retirement, and if that’s the case, planning ahead is essential. You may want to consider checking if your superannuation account is performing and whether or not you need to make extra contributions to grow your savings. You may want to consider starting an investment portfolio to provide you with an additional income source for your retirement income.

There are many financial strategies you can take to help ensure you meet your retirement goals. To help you choose the right strategies, it may be beneficial to seek personal financial advice. A financial advisor can help you develop your retirement plans and get you on the right track to achieving your dream retirement.

This article will explore how you can prepare your finances by planning for retirement. The sooner you start, the more opportunities there are to grow your nest egg.

Here’s what you need to know:

How Much Retirement Savings Do I Need?

The amount of money you need to save for your retired years will depend on your individual wants and needs. You may want to secure a comfortable retirement, which can look different to everyone and how much income you’ll need to fund this lifestyle is dependent on your personal circumstances.

According to the Association of Superannuation Funds of Australia (ASFA), here are the average annual income you will need in retirement (estimation for a person aged 65, who is in good health and who owns their own home):

  • For a Single Person: $43,687 per year
  • For a Couple: $61,909 per year
Image source: https://www.amp.com.au/retirement/prepare-to-retire/retirement-money-needs

Image source: https://www.amp.com.au/retirement/prepare-to-retire/retirement-money-needs 

How to Get Started Planning for Retirement

You may want to start by determining your financial goals and the strategies you can use to help achieve them.

Once you’ve listed your goals, you may want to consider your

  • Investment options
  • Your super fund investment strategy and if it’s tailored to your risk tolerance
  • Where you want to live
  • What your lifestyle looks like

A financial planner can help you determine what you need to consider when planning for your retirement and ensure you have the right financial strategies in place to secure financial security for your future income.

Determine Your Needs and Wants when Retirement Planning

Think about what monthly expenses you have now. These may include rent, food, healthcare, entertainment, gas, and other discretionary spending. You may want to use a budget calculator to help determine what you spend each month.

Create a budget for your expected retirement expenses. The budget should include everything you spend now, plus the additional costs you will have when you retire. You should consider your family size and whether you have a mortgage or annual expense payments. 

Project your income, and subtract your projected expenses from it. If your income is more than your expenses, you are on the right track to a financially secure future!

Creating a Budget For Your Retirement Income

Your budget should include information about your expected income and expenses. The budget should also have a breakdown of your expenses and savings goals. You may want to have a written document outlining your retirement income, projected expenses, and goals. By doing so you can keep track of your income and expenses either online or on paper to make sure things balance.

Better yet, you can include this budget within your financial plan with your adviser and have it reviewed annually, so you can ensure your financial strategies are up-to-date and in line with your personal circumstances.

If your retirement budget includes sufficient regular income to fund your expenses, you should be able to retire comfortably. If you have a gap in funding and need more money to meet your goals, you may need to adjust your finances and strategies to achieve them.

Develop Your Retirement Plan

Many Australians start retirement planning at least 5 years before they retire. You may want to seek a financial adviser who can provide you with tailored strategies and develop a plan that will meet your needs and wants. The important thing to consider is making sure your assets are managed to reach your goals and that your income is sufficient to handle your expenses.

An adviser can help you navigate what your retirement income options are and how you can build your nest egg to help you fund your ideal retired lifestyle. This is usually part of their retirement planning process and can help guide you through options such as:

  • property investment and how to manage your investment property as a retiree
  • the right investment decisions to offer you steady investment returns – now and in the future
  • debt recycling
  • contributing to your super fund

Start Your Retirement Plan Today To Secure Your Financial Future!

You can live comfortably during your golden years, by planning ahead and considering your retirement income options. It’s important before you retire, to keep an eye on your budget and make adjustments to your retirement plan when needed.

If you are looking for reliable and expert financial advice in Hornsby, we can help you. Hyland Financial Planning was founded on the desire to build a collaborative relationship with our clients. Our financial advisers share an ambition to improve the lives of their clients with strategic planning, wealth creation and ultimately — wealth success, leaving nothing to chance.

Contact us today to learn more and get started!

Or Book a 15-minute FREE Call!

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