Retirement: Welcome…you’ve made it! And one of the rewards for all your hard work is that you can now access your superannuation. Suddenly a world of opportunities opens up – a Caribbean cruise, major home renovations, upgrading the car, or maybe helping your kids.
Of course you deserve to celebrate your retirement, but bear in mind that your super might need to support you for the next 30 years or more. Eat too far into your nest egg in the early days and you significantly reduce the time that your super will last.
Take Rob and Sally. They retire with a combined super balance of $800,000. At an interest rate of 4% pa this nest egg will fund annual living expenses of $60,000 for 19.4 years. If they spend $100,000 on travel and home renovations and give a further $100,000 to their children, the reduced nest egg will now only last 13 years.
Here is the theory that is important both prior to retirement, as well as during retirement: The longer that an expense can be deferred, the longer the money will last, and the greater the total income received.
In Rob and Sally’s case, this might mean scaling back the travel plans a bit, putting off the renovations for a couple of years, and helping their kids by making regular, small gifts rather than a large lump sum.
Your super is there to help you enjoy life in retirement, but it’s a balancing act between todays wants, and tomorrow’s needs.
A little restraint now may allow for more fun later, so talk to Tamara about how you can make the most of your super in retirement.
At True Journey Financial, we can provide you with professional & personalised financial advice. We have been providing a friendly and family-oriented service since 2014. We assist clients all over Australia by way of virtual meeting.
So, if you’re ready to start making plans for your retirement, call us on 0732620021 or click here to book in a free discovery call with Tamara.