If you are planning for retirement or are already retired but wanting to improve your current financial situation, you may need assistance in preparing a financial plan tailored to your individual needs.
For financial freedom and peace of mind, now is the time to seek qualified and licensed financial advice. Contact us to get started
Ideally the earlier you start saving the more your savings will grow due to the benefits of compounding interest over a long period of time. Of course, while you’re young other priorities get in the way of focusing on your retirement, however small commitments to retirement at these younger ages will add tens of thousands to your retirement lump sum.
As you can imagine this is a difficult question, and the answer depends on your income needs throughout retirement, your investment preferences, are you comfortable spending your capital as well as your income, and of course the difficult question of how long you’re going to live. A comfortable retirement income for a couple aged 65 is approximately $60,000 per year, this income can be made up payments from their own retirement savings and also supplemented by the governments age pension if they meet the assets and income test.
First and foremost, we need to ensure that you are utilising tax saving strategies such as salary sacrifice into superannuation particularly in the latter years of your working life. It is these years debt should be minimal, and the kids may be more financially dependent than they’ve ever been, giving you increase cash flow to implement superannuation salary sacrifice strategies. Secondly making sure your asset allocation of your investments are set up to give your assets the opportunity to grow over the longer term. Remember, our retirement years could last through to over age 90 and we need to make sure that we give our retirement assets the best opportunity to last the journey.
You’ve paid off your mortgage! Now what?
Paid off your mortgage? Woo-hoo! Break out the champagne and celebrate the freedom you must now feel! But once the dizzy excitement has passed, what will you do next?
Cash flow and equity
With your mortgage paid down to zero but still open, a number of opportunities arise. The best one is the extra cash accumulating in your bank account. Do you want to spend this on lifestyle choices such as home renovations, holidays or regularly dining out? Or maybe save it for a rainy day? Or use it to boost your retirement savings through salary sacrifice? (You can, of course, do a bit of each).
Then there’s the equity in your home to consider. It may seem strange to celebrate the paying off of your mortgage by immediately redrawing on it, but if done wisely, investing those redrawn funds in a portfolio of sound investments could hasten the day when you reach financial independence. You may also reap some tax benefits.
Explore the options
Perhaps you want to simply enjoy the freedom of being mortgage-free. Whilst this is a great choice, if you want to investigate the wealth creation opportunities that open up once your home is paid off always seek professional advice.
We can help you explore a range of options that are appropriate to your circumstances. With a well-crafted financial strategy and a little patience you can look forward to celebrating more of those woo-hoo moments in the future.