How to plan for your retirement

Some of us dream about the day we can finally stop work and do all the things we never have time for.

Some love their work and want to keep contributing as long as possible, perhaps working part time into their late 60s and 70s.

Others simply put off thinking about retirement, either because they’re too busy, they find the subject boring, or they’re fearful they won’t have enough savings to live comfortably.

Whether you’re keen as mustard or in denial, the sooner you start planning the better your chances of making the most of your retirement years. The stark reality is there could be many of them.

Today’s 65-year-olds can expect to live to an average age of 85 years for men and 87 for women, or roughly 20 and 22 years respectively. And that’s only an average. Half will live longer, many into their 90s.

In fact, many of us could spend almost as long in retirement as we did in the workforce and that requires careful planning. A professional financial adviser can help you create a comprehensive retirement plan, but it’s not difficult to create a basic retirement plan yourself, even if only to help you figure out what questions to ask a professional. 

So get the ball rolling by working through these seven simple steps.

Step 1: How do you want to live in retirement?

Think about where you want to live and in what type of home. Maybe you want to holiday overseas every year while you’re still physically active or buy a van and tour Australia.

Do you want to eat out regularly, play golf and lead an active social life, or are you a homebody who enjoys gardening, craftwork or pottering in the shed?

Also think about your need for creature comforts, such as the ability to regularly upgrade cars and digital devices, buy nice clothes, enjoy good wine and pay for private health insurance. You may also want to help the kids financially or help with school fees for the grandkids.

If you are married or have a partner, share your thoughts with them. If you have different expectations about the way you want to live in retirement, it’s better to find out now while you still have time to adjust your plans.

Step 2: What will it cost?