Do your means support your dreams for retirement?
What is a retirement gap and how can you close it?
Your ‘retirement gap’ is the difference between the income you’ll need to live a happy and fulfilling life in retirement and the money you’ll receive from your retirement income.
Your retirement income may be derived from:
- a pension
- a superannuation lump sum payment or income stream
- earnings from your assets
- personal savings, or
- a combination of these.
Identifying your retirement gap is the first step in closing it, and having a plan in place to close your retirement gap is a key ingredient in building a secure retirement.
Are you on track to retire the way you want?
Our specialist team can help you to figure out how much money you will need to retire and assist you to close the retirement gap and meet your retirement goals.
Calculating your retirement gap?
A financial adviser can assist you to make a reasonable estimate of the amount you’ll need, either as a monthly or lump sum, for your retirement.
The basic formula for this calculation is to subtract the amount you forecast you will need for retirement from the amount you’re projected to have – the difference is your retirement income gap.
Not sure of your forecast?
That’s okay, a qualified financial adviser can assist you to review your finances and make this projection. Yes, even if you’re still a long way out from retirement age – it’s never too early to start planning your retirement.
At First Financial, we understand that retirement goals are personal, but believe that absolutely everybody can benefit from a retirement plan.
Remember, life expectancy statistics show that most of us could spend one-third to one-quarter of our lives in retirement – you may live much longer than you think, so it pays to be prepared.
If your rough calculations indicate you will have a retirement gap to close, don’t despair, there are many steps you can take now to close your retirement gap and live the life you choose in your later years.
Develop a retirement investment strategy
Investing for retirement requires a different approach to the mindset you may have for saving for retirement.
Saving for retirement will likely include making regular contributions to your superannuation during your working life and, when possible, making regular extra contributions.
For most workers, your superannuation will continue to compound for three to four decades before you even come to think about transitioning to retirement.
Investing for retirement is also a long-term game, with the aim to accumulate assets that accrue wealth over many years to lower your retirement gap when the time comes to transition out of work.
But the investment objectives you subscribe to in building your wealth portfolio to safeguard your retirement must be carefully considered to ensure the investments have time to mature and reach their full potential.
Many investments also have complicated tax implications and may include lender stakeholders and minimum levels of equity or income to fund the purchase.
At First Financial, our unique investment philosophy can assist you to build an investment portfolio that generates tax efficient income that is hedged for inflation and an investment plan that is in line with your personal risk tolerance and accessibility.
Our specialist team of advisers knows that the more you earn from your investments, the smaller your retirement gap will be – and the more likely you are to have investments capable of supplementing your retirement income and helping you live the life you want after you’ve finished working.
Developing a retirement investment strategy is not a DIY approach.
Ask us how you can get started today.
Pay more into your superannuation
As we touched on above, a surefire way to reduce your retirement gap is to make regular contributions to your superannuation – both concessional or non-concessional contributions.
Thanks to the highly tax-advantaged structure of superannuation, particularly for concessional contributions, this strategy can make a huge difference to reducing your retirement income gap and guaranteeing a reliable income stream in retirement.
Note, there are restrictions in the amount of contributions you can make and when you can access your super, particularly if you want to draw down an income before your preservation age.
Speaking of super, do you know how your super is performing right now?
Is it time for a superannuation check up?
Ask us today how you can get the most out of your superannuation, now, and into the future.
Manage your expectations
Are your expectations for retirement realistic?
We are not in the business of shattering dreams, in fact, we specialise in helping you to achieve your financial goals.
But it pays to consider if your expectations for retirement are in line with the expected results of your investments and your superannuation savings.
At First Financial, we believe the key to unlocking freedom in your retirement is starting early to prepare for retirement.
Our team works with you to take stock of your personal situation, assess your likely retirement gap and what strategies you can use to close the gap to achieve your retirement goals.
It is our passion to help clients become retire life ready and we can help you to develop a realistic retirement plan.
Want to invest wisely but don’t know where to start?
Ask us about wealth building to protect your lifestyle and work towards the retirement you deserve.
