No matter what you have, it’s never enough so how do you know if you have enough according to your needs? You will have enough if the total investment assets you have (property, shares and cash) generate enough cash-flow (notice I didn’t use the word ‘income’) to fund your lifestyle, either the one you’ve imposed upon yourself over time or the one you aspire to.
Let’s cut straight to the chase. Here are 6 QUESTIONS you need to answer, in order to start planning. Because when you know where you want to go, planning the route that gets you there is the easy part.
1. What do you want to do in retirement?
2. Where do you want to live?
3. What does retirement mean to you?
4. What does financial security mean to you?
5. What are the risks to pursuing your goals?
6. How will you pay for the retirement you want?
List the activities you’d enjoy, things you want to learn or places you’d like to visit during retirement. What do you see yourself doing daily, monthly or yearly? How might these activities differ in the first 10 years of retirement, the second 10 years and beyond?
Answering this question will help you to estimate the living expenses you’ll need to cover as part of your plan.
Some people imagine living in retirement as a time to rebalance priorities, spend time with family, enjoy a hobby or give back to the community – what about you?
What do you need to be comfortable in your retirement – lifetime income strategies, funds to cover possible risks, the ability to leave a legacy?
What concerns you about retirement? What would you do to address risks that you may face? Your financial plan will incorporate ways to manage risks including longevity, legacy, market, inflation and taxes, health care and long-term care.
How much money will you need to be able to live the life you imagine? What assets and resources might be available to support your retirement? What income streams can you plan for that will cover your fixed expenses as well as any discretionary spending?