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Mark Screen, financial adviser at BDCU Alliance Bank, says planning for retirement is like planning for a holiday.
“It’s about creating that roadmap to get themselves to a better place” he said.
There are three main parts in this process: use the right strategy before retirement; budgeting correctly through retirement; and financially coaching people through retirement.
PREPARATION
For people aged 50 to 65 (or younger), this is a “time to work on achieving their goals” said Mr Screen.
“It is a chance to get themselves organised, to see what they can do, then start doing it.” Mr Screen observed that each person or couple has different goals, and different perceptions of what is a modest or comfortable retirement lifestyle.
You may consider paying down debt and other strategies to “get you in a better financial position so you have more money to spend.”
To achieve this, it can be really helpful to see a licenced professional.
“The biggest difference in seeing a good advisor, is getting people to do that wonderful word, plan,” he says.
Over the course of two or three meetings, your adviser will talk to you about your goals, your circumstances, and look through all the information you give them.
“People need to be really clear on what is important to them.” Your adviser will then “Look at options, and come up with a strategy for the best outcome”.
They will also create a detailed budget for retirement to cover necessities, emergencies and indulgences.
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RETIREMENT
Whether you dive right into full retirement or transition slowly by way of semi-retirement is entirely up to you.
Mr Screen says it’s normal for people to “want to stay productive and to stay engaged with the community.”
The option of semi-retirement means you can do the types of work that you want to do, whereas many full-time workers are doing the work they have to do.
“Financially, (semi-retirement) puts money in your pocket, and you can earn a certain amount each fortnight without affecting the aged pension,” he said.
If you go straight to full retirement, the detailed budget will help you make sure you’re not over-spending early on.
STAYING ON COURSE
Just as a personal trainer helps keep you on track with fitness goals, a good financial adviser maintains an ongoing relationship with you to help you stick to your financial plan.
“Life continues to change even in retirement,” Mr Screen said, “and they can call if they get worried.” Your adviser will have a look and reassure you that everything is fine, or maybe help you make a few little adjustments to get you back on track.