Regularly checking in on your retirement plan is always a sensible strategy. Keeping track of your finances becomes even more important in times of economic uncertainty. Given the changes we’ve seen due to Coronavirus, now is a good time to take a look at your retirement income plan with fresh eyes. We’ve put together a list of resources to help you.

Put your assumptions to the test

Making sure your retirement income is secure is an essential ingredient to a comfortable retirement. But many Australians rely on incorrect assumptions when making decisions about their money.

Are you 100% sure you’ve got the facts?

Learn how to protect your income from poor share market performance

Recent events in global markets have put money in the spotlight for many retirees. According to the ABC’s Covid-19 Monitor ¹, over half of the Australians surveyed are ‘very’
or ‘extremely’ concerned about the economic impact of the Coronavirus. In fact, they’re more worried about the economic impact than their own personal health risk.

The first quarter of 2020 has seen significant falls in both domestic and global share markets, which may have left you feeling concerned about the impact on your retirement income. The good news is, there are steps you can take to feel more confident about your money.

We explain the risk of poor share market performance in retirement and explore options to help you protect your retirement income.

Flex your budgeting muscles and keep spending on track

Chances are your spending patterns have changed since 2020 began. Research² for the first quarter of 2020 showed that overall, household spending behaviours were more conservative as significantly more consumers cut back on non-essentials. While many Australians are spending more on items like food and groceries, spending on eating out, holidays and travel has obviously fallen.

With less temptations for spending, now could be a good time to revisit your budget. Have any of your expenses gone down recently? Have you found there are things you can do without? What things have been essential to your lifestyle and wellbeing?

Staying on top of your budget is key to spending confidently in retirement.

Find out if your retirement income will last for your lifetime

With longer lifespans and less certainty in world markets, making sure your money goes the distance is more important than ever. It’s no wonder that 84% of older Australians rated the desire for regular and constant income as very important³. But how do you make that happen?

Put your retirement income to the test and get results that show:

• how long your retirement savings will last;
• whether you’re eligible for the Age Pension or an increase in payments; and

how much annual income you could guarantee for life by adding a lifetime income stream to your retirement income plan.

Get help from the experts if you’re feeling uncertain

At times like this, it can be hard not to worry. In fact, we’re hard wired to pay greater attention to bad news which can create anxiety for even the most confident investors. Talking to a financial planning professional can ensure you’re following a strategy to achieve your goals for your retirement income.

Call LT and speak with one of our financial advisors to day on (02) 4926 2300.

1 https://www.abc.net.au/news/2020-04-28/coronavirus-data-feelingsopinions-covid-survey-numbers/12188608
2 https://business.nab.com.au/nab-consumer-anxietysurvey-q1-2020-39188/
3 https://nationalseniors.com.au/uploads/09172675CRP_ChallengerReport_
RetirementIncome_FN_0.pdf
4 https://www.psychologytoday.com/au/articles/200306/our-brainsnegative-bias

Source: Challenger

The post Staying on track appeared first on Newcastle Financial Planners & Financial Advisors.

Living the good life, retiring happy, wealthy and wise

Retirement is a little like Clark Kent taking off the Superman suit. It’s peeling off an identity – from an industry, a company, or a personal work history – and entering an entirely new life stage.

There’s freedom and excitement, the time to do all the things we’ve been waiting for, but there’s also some fairly key life changes and adjustments to make, some of which may be totally unexpected.

Although retirement is one of life’s most mentally challenging milestones, retirement advice usually focuses on finance rather than feelings. Planning for both can make a tremendous difference.

The bright side & the down side

So, what are the changes we face when we step into the retirement phase?

Time stretches luxuriously in front of us, something many of us have craved our entire working lives. Time to travel, read the books we’ve always wanted to read, take up a new interest or spend hours doing what we love. Some of these activities require money; many just need a good attitude and a mind that loves a challenge. However they all hinge on what retirement offers: time, and a lot of it.

But retirement can carry a downside. As Dr. Robert Delamontagne writes in The Retiring Mind: How to Make the Psychological Transition to Retirement, “For the first time in my life, I had no answers. I had fallen into a black hole where there were no guideposts for me to follow. What had happened to me? I built a successful company and lived a very active and dynamic life…yet I had no clue what to do next. For the first time in twenty-five years, I did not have a company to manage, nothing that urgently needed to be done, and, most troubling, no one who needed me to make a decision or contribute to a discussion. I did not play golf, nor belong to any clubs, and had little interest in doing either.

I wish that I had though, because brother, was I stuffed.” 1 The challenges of retirement can be numerous – from dealing with a change in identity and filling the hours previously spent working, to being labelled ‘retired’ or feeling unneeded. With no job, industry, company or colleagues to confirm who we are and where we fit, it’s easy to forget our own sense of purpose.

Charting a new course

Whether retirement is a goal or an unexpected curve ball, planning for retirement mentally as well as financially is key. Some people take a hybrid approach and continue working – either part time, in a consultancy role, or in a new industry with reduced pressure (and salary).

Many choose to get involved as a volunteer, evidenced by the 34% of the adult population of Australia who volunteer at least one hour every week with community organisations.2 Others take on a new project, sign up for courses, or help family raise young children.

Charting a new course for retirement means we need to think about our values – and act on them. What we do with retirement will give us satisfaction if it lines up with what we truly value. It’s wonderful to take care of the grandkids, for example, but extremely important to decide upfront how much time you’re happy to give. And buying that beach house is only a good idea if you love relaxing, which some people actually don’t.

Feeling good about retirement is an important goal, but it may not come as naturally as we think. It’s important not to underestimate the psychological impact and that’s where planning can help. Sorting out real values from perceived values will help us transition into retirement – and live the good life we’ve been waiting for.

1 Delamontagne, Dr Robert P. The Retiring Mind: How to Make the Psychological Transition to Retirement, Synergy Books, 2010, pp.1 – 2.
2 Volunteering Australia FAQs. www.volunteeringaustralia.org

The post The Psychology of Retirement appeared first on Newcastle Financial Planners & Financial Advisors.