Travelling, enjoying new hobbies, spending time with family and socialising with friends. These are probably the most common ideas people look forward to when retiring in Melbourne. Because most retirement is still years away for most, getting prepared for retirement is often left until the last few years of your working career. Like the super contributions put away for you from an early age, preparing for your retirement early will ensure the most successful and relaxing experience for you and your family.
If you want to learn how to prepare for retirement in your 50s, you can take a few simple steps to make that process further down the road a lot easier.
Establish Your Retirement Date
While not everyone will have a solid plan throughout their lives, retiring isn’t something you can easily organise one morning. If you want to make life easier for yourself, it’s important to have a plan, even if it’s just as far as an estimate as to when you’d like to retire. Giving yourself an exact age when you’d like to retire will ensure that you’ve organised your finances and completed unfinished goals or tasks while still working and financially independent.
Think About the Lifestyle You Want in Retirement
Retirement is an exciting time but can also be filled with doubt. With so many big decisions to be made about your retirement, you’ll want to make sure that you’ve chosen the proper lifestyle for your desires and goals. So before jumping into the planning phase, take some time to think about what sort of lifestyle you want in retirement.
- Do you want to travel? If so, how much? Where would you like to go? Will travel be part of every year or just once in a while?
- Do you have hobbies that need more than occasional attention or space? Are there skills you want to learn (e.g., languages or musical instruments)?
- Will you spend most of your time with family and grandkids, or do you want to spend time doing things for yourself?
Retirement Funds and Sorting Out Financials
While you have the security of your superannuation, it’s crucial to establish a budget when preparing for your retirement to ensure that your funds won’t run dry. This budget should account for your super fund and other revenue streams such as your savings, investments, government payments and anything else relevant to you.
Your budget should account for general day-to-day living costs, funds for your lifestyle and hobbies and expenses or bills that will occur regularly. Once you calculate this, you can estimate how much savings and income you need to maintain your desired lifestyle.
As a guide, the Association of Superannuation Funds of Australia’s (ASFA) March 2022 figures outlined that for those that want a comfortable lifestyle, it’s recommended that singles have an annual budget of $46,494 while couples need $65,445. For those that don’t mind a more modest lifestyle, it’s recommended that you have a yearly budget of $29,632 for individuals and $42,261 for couples.
You can think of this retirement budgeting process like a monthly budget plan, except this will be calculated and accounted for years of your retirement, not months. For those who want to start preparing for retirement in Australia and ensure they have a healthy and livable budget, you can always seek a financial advisor for added assurance.
Where Will You Spend Your Retirement?
One primary consideration when preparing for retirement is establishing where you’ll be living. You need to live somewhere throughout your retirement that suits your lifestyle, finance and health needs, especially during the later years of your retirement. Whether this means downsizing your current home or moving into a retirement village, many options are available to suit your needs.
Retirement villages are a common option for those going through their retirement. From assisted living to independent retirement villages, many choices are available to meet your needs. Selling your home can free any financial strain from your retirement budget and offer more opportunities when choosing the right retirement village. You can say goodbye to mortgage payments and instead welcome a community built on connection and support with more financial freedom to accommodate your new lifestyle.
While some will decide to sell their home and downsize into a smaller property, others may prefer to move into a retirement village for their retirement. The most crucial aspect to consider is to find a place where you feel comfortable and safe to call home throughout your retirement.
Start Planning the Right Retirement Plan For You
Once the big picture of your retirement is sketched out and planned, it’s time to look at how different options will work practically. It’s important to remember that no retirement plan that’s made can ever be followed exactly. Life will always throw a spanner in the works, so while planning is important, remember to be open to change and adjust your plan when needed. The most important step when learning how to prepare for retirement in your 50s is to ensure that your plan aligns with what you want from life. This will ensure your retirement is filled with years of happiness and joy.