Financial Questions to Ask When Planning Your Retirement

Posted on September 11, 2011
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The global financial crisis has brought the thought of retirement into question for many. It has brought a realisation that you need to make some compromises to live the lifestyle you would like. So what are the financial questions to ask yourself when planning your retirement? The answers to the questions that you ask yourself will help determine your enjoyment over your retirement years.

What are the sources of income in retirement? There are typically four sources of retirement income and they will depend on your particular circumstances and how you have prepared for your retirement. These are Social security (Superannuation in New Zealand), employer-sponsored retirement plans such as 401k or the KiwiSaver scheme in NZ, personal investment and post-retirement employment if you still work.
How much will I need? While you may be carefully putting away funds for your retirement, the real challenge is to know what your retirement income needs may be, long before you even retire. Generally the aim has been to achieve up to 75% of your current income.
Will I need to work in retirement? Working after retirement age may be a necessity or may be for self enjoyment. For many the thought of not working can even cause anxiety. If you want to work then why not!
How long will I need to provide for in my retirement years? You may need to accumulate funds to provide for twenty or thirty years. That’s a long time not working. If your family have longevity on their side consider that you too may live thirty or more years in retirement.
Where will I retire to? This is more about lifestyle but financially you need to provide for the answer. Will the place be warm to stave off any arthritic pains? Will you be nearer family?
Will I need to downsize my home? While this may appear to free up some capital remember that smaller housing may be more popular where you want to live and prices similar to your bigger home. There may not be all that much left in the pot to invest.
Do I want to travel when I retire? In the early stages of your retirement this might be a popular activity, after all you want to make the most of the time you still feel like travelling. There may come a time where ill-health will prevent this. You need to allow for your travel goals when planning your retirement.

Financial Planning

Planning your retirement is not all about money but finances help you to do what you want. Ask these questions of yourself when planning your retirement and see a Financial Planner to get your plan sorted.

Financial Questions to Ask When Planning Your Retirement

Lyn Bell has been in the finance industry for more than 30 years and is a Certified Financial Planner. She has helped many clients achieve their financial goals. Sign up to get Lyn’s free newsletter SoundFinance News and receive a free gift.

Please note this article does not contain specific advice and is for information/education purposes.

A disclosure statement is available free on request.

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