If you thought that planning your retirement is just saving money on your account, you are wrong. Retirement plan includes tax planning, investment planning, determining how much money you will need, but in fact, retirement planning is financial planning for the period once you retire.
Everyone should prepare his retirement plan wisely or consult with a financial planner. The unique type of super fund Australia offers to its citizens is a great way to be a trustee of your saving account for the retirement. To calculate an individual’s service retirement there are few factors considered:
Service credit (years) + Benefit Factor (% per year, age) + Final Compensation ($) = Pension / Unmodified Allowence ($)
A pension is a way to secure yourself money and have an income later in your life. The retirement plan is important and it doesn’t happen just like that, it requires a realistic plan and sticking to it. You can discuss your saving options and investments with the bank where you have your saving account or SMSF. The advice to bank’s account holders should be free, with hopes to gain more money of their savings.
As the retirement planning is an important task, here are our tips how to plan your retirement rationally.
Set a realistic plan
First of all, you need to calculate all your retirement expenses and estimate how much money will you need in the retirement. Be realistic about everything and then you would be able to calculate how much do you need to save.
Start saving as early as possible
If you are in your early 20s, you probably would say that it is too early to start planning your retirement. Your career advancement and earnings might vary, but as all issues dissapear in time, planning your retirement in young age could give you much time and flexibility to prepare for the retirement. In 40 years before your retirement there will surely be odds improves and whenever they occur, you could catch them if you start with saving now.
Set your retirement ahead of your kid’s college
Being a parent means making sacrifices for your kids and their futures. If you are in doubt whether to fund your retirement or your kid’s college, the better option is to fund your retirement and secure your kids a better future. There are many ways to fund your kids’ college, scholarship or summer jobs. For instance, you can loan some money to cover such payments, while nobody will loan you for your retirement.
Your retirement plan must involve a tax planning and although it seem a little hard, it is not so much. You can calculate your taxes, do a research, consult with financial professionals and you will be able to have your tax planning done.
Protect your assets
It is strongly recommended to protect your assets with a buy-sell agreement. This is important if something unexpected occurs, such as divorce, death or disability. With a proper strategy, you can create an asset base for your beneficiaries.