How to improve your financial wellbeing as you plan for retirement

It’s no secret that like many other developed countries, Australia is ageing – one in six of us is now aged over 651 with more than four million baby boomers2 approaching or considering retirement right now.

The baby boomer generation has worked and saved hard over many years, but hikes in the cost of housing, food, electricity, healthcare and taxes over the past decade have increased the amount they are likely to need for a modest or comfortable retirement3. If you’re part of this generation, have you considered how much money you’ll need for your retirement and what strategies you’ll use to get there?

A solid personal financial plan is a good place to start

While everyone’s goal for retirement is different, depending on their personal circumstances and lifestyle, a good plan today can help lay the foundation for improving your wellbeing now and into retirement. But not everyone knows how all the pieces of their financial life fit together, particularly as things change and you need to rethink your plans. As Walt Disney—a man who went from bankruptcy to go on to financially rebuild his life — once said, “times and conditions change so rapidly that we must keep our aim constantly focused on the future.”

For example, do you understand the implications of ongoing changes to super rules? Is your income suffering from low interest rates and volatile investment markets? And have you considered how longer-term issues like health and mortality, risk of financial abuse, and how the potential cost of aged care services could impact your financial future?

If you haven’t yet considered these issues, and so many others, you’re not alone.

Are you one of the three in five Aussies without a financial plan (or with merely a loose one)?4

If you haven’t quite developed a proper financial plan, that’s OK. It’s not too late to make the change and address all those questions. Consider these steps as you work towards developing a plan to try and improve your financial wellbeing.

  1. Identify your retirement goals and ensure they’re realisticWant that trip to Tahiti? Let’s face it, a lot of people spend more time planning holidays than planning for retirement because they perceive it as more fun and attainable. But it’s important to realise that many of your goals, such as actually saving for retirement or paying down the mortgage do not happen overnight (unless you win Lotto). They’re achieved through planning and setting timelines. By understanding what retirement means to you (and identifying other goals along the way), you have something to work towards, and importantly, figure out what’s achievable in the timeframe you have.
  2. Review your spending habits
    This is more than just totalling the sum of those daily coffees (although it can be a whopper); it’s about negotiating better deals, reducing fees and interest costs, and making your money work harder. Budgeting is a balancing act where you manage your expenses to the point where you have enough left over for tomorrow’s needs. Reviewing your current cash flow, looking at ways to build a nest egg, and paying down debt while also considering investing can all be part of a well-structured financial plan. Through this process, you may also discover potentially more effective tax planning strategies that can save you money. You may find that there are more effective ways to manage your super through strategies like making non-concessional contributions (if eligible), equalising balances with your partner, or in other ways altogether.
  3. Understand potential risks and help protect your assets
    Have you considered what will happen if you become injured or mentally incapacitated? Do you have a succession plan, a will, or personal estate plan? Do you understand how to invest or retire in this current low interest rate environment or are you just unsure about what you need help with? These are all things that should be included in a financial plan. For SMSF trustees, talking to an adviser at a firm like Dixon Advisory that can help support your SMSF in line with your plan may make all the difference. You retain control but have access to specialists in all those complex areas like estate planning, strategic financial advice and accounting, and we can take care of all the paperwork too.
Nerida Cole talks world market and women’s finances - ABC Weekend Breakfast

What’s going on globally? Join Nerida as she breaks down how Australia’s market is performing against the current global backdrop and discusses the barriers facing women seeking financial security in retirement.

Financial wellbeing is living, planning and managing today responsibly for tomorrow

Taking care of your personal financial wellbeing can be as important to your overall wellbeing as a roof over your head, nurturing social connections and maintaining physical and mental health. While approaching your finances in this way can be complex and understandably, a little daunting, just like getting a personal trainer to help you get fit, a good adviser can help you identify the key issues and work out how to effectively address them.

Ultimately, getting good advice can help you gain more financial confidence. While it may not happen overnight, the right approach and partnering with a trusted professional may be the key to help manage your financial wellbeing.

This insight may contain general financial advice and was prepared without taking into account your objectives, financial situation or needs. Before acting on any advice, you should consider whether the advice is appropriate to you. Seeking professional personal advice is always highly recommended. Any forward looking statements are based on current expectations at the time of writing. No assurance can be given that such expectations will prove to be correct.

Interested in learning more?

How Amazon's Australia launch could disrupt local retailers

Lyle Meaney, Managing Director, Wealth Advice

Amazon's impending Aussie entrance is forecast to cost local retailers up to $12 billion – the amount analysts believe the mega online retailer...Read more

Tips for investing in a low interest rate world

Lyle Meaney, Managing Director, Wealth Advice

As you get closer to retirement, the natural tendency is to allocate your investment portfolio to defensive assets to help preserve the capital you’ve...Read more

In this section

Our insights

Dixon Advisory

Dixon Advisory is a holistic family wealth management firm supporting over 8,000 Australian members to manage their wealth for retirement through self managed super funds (SMSFs).

Want to keep informed?

Receive regular insights on a range of financial and investment topics.