Are you making these mistakes in your retirement?

When you embark on anything new, you are bound to make mistakes. But when those mistakes are in relation to money, they can have big implications.

So how do you avoid those rookie mistakes when you start your retirement? The first step is to know the common things to avoid that other people may have made so you can learn from them.

Here are the key things for you to focus on:

• No financial Plan – Whether you think you have enough money and you’ll be right, or you think you can do it yourself; money matters are complicated. It’s often best left to a professional to structure a plan for your money in retirement as it could be the difference between a great retirement and a basic one.

Failure to plan is the biggest mistake made by those about to embark on retirement. And it shouldn’t be left to the last day. Retirement planning should start much earlier to ensure you can achieve your goals.

• Money changes – retirement gives access to superannuation. Forced savings for retirement but it doesn’t mean that you should automatically jump to take it out. The superannuation system provides significant tax savings and taking your money out could mean that you now pay more to the tax office.

Alternatively, some retirees change their investment allocation in super to cash and other conservative assets because they’re in retirement, so it must last. It’s important to remember that with modern medicine we are living longer so your retirement investment timeframe could be 20 or 30 years longer. Without some growth during this period, your funds may not keep up with inflation.  You are investing for the rest of your life.

• Overspending – the thrill of retirement and the ability to access all those savings can sometimes go to your head. New car, new caravan, holidays are all set for one day but jumping into them all at once when retirement hits could mean you have significantly less to live off throughout retirement.

Budgeting will help with overspending, allowing you to work out what you can and should be spending now and further into retirement.

• Retiring too early – without a financial plan (mistake 1) how can you tell if you have enough to live off for your entire retirement? Some retire because it was their goal to stop working at age 60 but rather than do the numbers they end up with a much less quality of life in retirement as they don’t have sufficient assets to fund the life they wanted. Think about whether you have the money and resources to live the life you want to live before you retire.
• Relying on Centrelink – many think they have worked hard all their life and paid taxes and so are entitled to Government benefits to fund their retirement. You should understand that the maximum Age Pension benefit available to a couple is just under $38,000 per annum combined. In addition, to qualify to receive this maximum pension benefit, you would have to hold under $405,000 in assets outside your home. (You should refer to the Services Australia website or speak with our office to find out what you could be eligible for).

If you’re thinking of retiring soon, make sure you take the steps you need to avoid these common retirement mistakes. By seeking professional advice, you not only protect the money you have but you put the right financial place for you to help you achieve your dream retirement.

Put yourself in control and create a plan design to suit you.  Reach out to the JBS Financial team to review your circumstances and let’s get your plan underway.