Retirement Goals!

For some, retirement is a long way off!  For others, it seems to be creeping up a lot more quickly than expected.  The years have flown by and it’s time to start taking stock.

Many who visit me in their late 40’s to mid 50’s sometimes realise that they’ve put retirement on the back burner for a little too long.  With taking care of the Mortgage and the kids… retirement saving was a long way down the list!

But for those ready to hang up the boots, whether at 65, 70 or beyond… what can you expect?

Many advise that a new kind of balance is required, one that takes a bit more planning than expected.

It’s good to start thinking about your vision for your retired life and the values you have that may drive those goals.  Have you been planning travel? volunteering? hanging out with the grand kids? visiting more with elderly parents? taking up a hobby?

Strange tho it may seem, retirement and pure leisure hours only, can impact your health.  Everything you’ve ever known has suddenly stopped.  Routine, income and your network is no more which can have a big impact on mental health especially.  Choosing to be optimistic about your future options is incredibly important.

Family relationships can also come under scrutiny.  Suddenly spending 24/7 with your life partner may not be what either of you expect.  Learning how to communicate what both of you need, while maintaining some sense of independence is vital!

Are you looking to replace the hours you spent working with something else?  Some enjoy volunteering, others enjoy researching the family history or writing that book that you always put off, even learning a new skill or going back to school can be considered.  Travel plans also need consideration – those who’ve traveled extensively during their work life may not wish to venture so far from home, others can’t wait to become intrepid explorers!

Often, what to do with the family home also needs consideration.  Some empty-nesters love keeping their family home and it’s memories, others like to move on and downsize for less maintenance and possibly availing themselves of additional funds.  Moving interstate to be near the family or a group of friends also needs consideration but taking on too many things at once can be a little overwhelming… it’s good to learn to pace yourself.

Managing the finances also requires careful consideration.  Some find that their immediate spend in the first few years following retirement is much higher than they’d previously thought it might be.  Funding travel or new gadgets may be fun, but if they haven’t been budgeted for, can impact the long term value of savings.  Longevity risk is gaining a lot of exposure now, with many living well into their 90’s and hoping they don’t outlive their savings.

Who knew that ‘hanging up the boots’ could be so complicated?

It’s a great idea to sit down with your adviser and talk through your options.  What works for one, won’t work for all, so setting and achieving what’s important to you is vital.

5 ways to keep business debt under control

Managing business debt can help you steer clear of financial trouble!

Piling up a lot of debt could leave your business in financial difficulty or, worse, bankrupt. Here’s five ways that may help you manage debt and avoid a financial mess.

1. Understand your business situation

It’s important to keep track of debt and money owed to you by having a record of your creditors and debtors and amounts involved. If tracking your business finances requires more than a simple spreadsheet, you may want to consider a bookkeeping system to make monitoring more efficient.

2. Prioritise debt payments

Once you have a good understanding of where your business stands financially, prioritise your debts.  Identify which debts you must repay now and which ones you can put off or put onto a payment plan. When prioritising, consider the urgency of the debt or the importance of the creditors to your business.

3. Negotiate with creditors

It may help to speak to creditors openly and honestly about your business situation. Ask if there are any hardship provisions or if you can have your due date extended. Talking to your creditors as early as possible can save you from paying more penalties and other charges. It may also be a good chance to negotiate for better terms and rates on your business loans.

4. Collect outstanding payments

You may want to collect payments from your own debtors to help improve business cash flow. If you have a long list of debtors, prioritise them by going after the biggest accounts first.

5. Protect what’s important

There are steps you can take to help protect your business from risks that can affect its ability to continue operating. Taking out a business insurance policy, for example, may help you by replacing lost income or maintaining cash flow.

A financial adviser may be able to help you determine if business insurance might work for you. I’m happy to chat further about any protection questions you may have.

Saving for retirement: Hacks for parents with dependents

You can build your retirement savings while supporting your dependants.

Providing for the kids doesn’t have to come at the expense of stashing funds for retirement. There are ways you can build a sufficient nest egg while supporting your children.  And chances are, you’ll be spending a lot longer in retirement than previous generations… who knew?

Saving for retirement

Forced saving can be your best ally in building your retirement fund. Making voluntary contributions to your super through salary sacrifice can seriously boost your nest egg.  You can make concessional super contributions of up to $25,000 each financial year (which includes your employer’s super guarantee contributions.) The government will tax your salary-sacrificed contributions at 15% which may be much lower than your marginal tax rate.

It may also be worth looking at how and where your super fund invests your money. Choosing a different investment option may help you earn better returns and grow your super.  Do you know what your Investor Risk Profile is?  Conservative?  Balanced?  Aggressive?

Super can be a difficult subject to get your head around. Have a chat with your adviser about how you can boost your super by making voluntary contributions or changing your investment options. Your adviser can also knows about retirement saving options beyond super.

Protecting your income

While you’re building your fund for retirement and still supporting those eating you out of house and home, it’s important to protect your current income in case you’re unable to work due to an illness or injury. Taking out income protection insurance is an incredibly wise precaution against any event that can prevent you from working. This policy may provide a monthly income to support you and your family during your recovery and help you stay on track with your financial commitments.  Premiums are tax deductible.  And if you think about it, why wouldn’t you insure your most important asset? – the ability to earn an income!

It’s also crucial to ensure your dependants are looked after if you die or became seriously ill or disabled. Having life insurance, total and permanent disability cover, and trauma insurance can help you protect what’s important to you.

Get advice

Balancing your need to prepare for retirement and your responsibility to your partner and kids can be tough, but keep in mind that help is always available. Speak to your adviser about how you can provide for your dependants while building a nest egg for a comfortable retirement.

Your future self will thank you for it!