How to plan a fulfilling and financially secure retirement

For successful people, one of the hardest things about retirement planning is trying to envisage how they’d actually like that stage of their life to look.

Would the perfect retirement mean huge slabs of time spent travelling overseas, new hobbies, a fresh enthusiasm for the gym, part-time consultancy work, gifting money to family or charities, or spending more time with loved ones? Or does the very thought make them panic?

“Wealthy people often get wealthy because they’ve been successful in careers or running businesses, so a lot of their self-worth is invested their work, as well as their social circles,” says financial planner James Wrigley, author of the new book Retire Life Ready.

“So they often wonder what they could do outside of what they’ve done to get to that position. We often see people retire and then, within six to 12 months, they’re back in the workforce.”

As a result, every age group should start thinking early about what they’re working towards. Only when they have a clear idea can they start planning their finances effectively.

“You need to take stock of where you are, with mortgages or other debts, and your assets, with shares, investments, properties, super funds, and how they’re likely to accumulate,” Wrigley says. “Then you need to review these figures and how they’re tracking every couple of years.

“Only 33 per cent of Australians are optimistic about being financially prepared for retirement, but these are the first steps towards being able to grow wealth to bring clarity and assurance.”

New research from financial services company AMP reveals that only half of Australians feel financially confident about retirement; many suffer from FORO, or the fear of running out (of money).

Its annual Retirement Confidence Pulse report found such fears are strongest among the “sandwich generation” – those caring for both kids and elderly parents – and those who are closest to 65.

“We’ve known for some time that we have a confidence deficit gap between how confident we are, and how confident we should be,” says AMP director of retirement Ben Hillier. “But people are fearful because they haven’t been paying attention.

“It’s a complex subject, but there are a lot of tools available to help. Most funds, like ours, now have advisors who can provide personal advice, or digital tools to help, or you should see a financial advisor, which can add significant financial value and peace of mind.”

The importance of a sound retirement tax strategy also can’t be overstressed, says Ben Nash, founder and advisor of Pivot Wealth, and author of the book Virgin Millionaire.

“A good tax plan leading into retirement will enable you to keep more of your income and earnings from investments,” he says. “That will also help you make much faster progress towards whatever your financial retirement goals are.”