Danielle McCarthy

Retirement Income

5 biggest retirement planning mistakes to avoid

5 biggest retirement planning mistakes to avoid

Like any major stage of your life, the transition to retirement is all about careful, considered planning. As Equip Super notes, “Transitioning from working life to retirement is a big step. If you’re used to a 5-day week and the security of a monthly pay cheque, there are both economic and lifestyle issues to consider.”

Unless you have a Masters in Finance however, it can be difficult to know where to start and what sort of a behaviour to avoid. So, we’re going to give you a rundown of what not to do. Here are five retirement planning mistakes you must avoid.

1. Not having a budget in place

A budget is probably the simplest element of a retirement plan, but it might just be the most important. The Association of Superannuation Funds of Australia’s (ASFA) Retirement Standard figures for the December 2016 quarter show that singles who wish to lead a ‘modest’ lifestyle in retirement will need to meet an average of $24,108 in living expenses, with this figure at $34,687 for couples wishing to do the same thing. Having a strict budget in place is the only way you to meet these expenses on a fixed income.

2. Not diversifying your investment

“Don’t keep all your eggs in one basket” is a cliché alright, but there’s a reason it exists. Ideally you will want your money spread across different asset classes so you’re hedged against market forces that are out of your control. Products like Equip Super’s MyPension spreads your assets across cash, conservative and growth investments to provide you with a reliable income that will allow you to retire with confidence.

3. Not taking advantage of opportunities

Retirement isn’t simply a matter of picking up your gold watch and riding off into the sunset, and there are always opportunities to top up your investment before you make the big leap. It’s important to explore options like salary sacrificing and government co-contributions to make sure your nest egg is as healthy as it can be. A qualified financial planner is the best way to explore the opportunities at your disposal.

4. Leaving your money in the bank

While it’s important to have a safety net to cover for the unexpected, it’s almost criminal to leave large funds sitting in a bank when they could be doing so much more if invested elsewhere. Therefore, it’s a good idea to explore options like annuities, term deposits and topping up your super, to make your money really work for you.

5. Failing to get financial advice

If you don’t know how to get there, there’s guarantee that you will arrive at your destination. The same is true in retirement. Failing to get advice from a qualified financial planner can leave you unaware of the opportunities that are open to you, or any mistakes that you’ve made along the way. As Equip Super notes, “Speaking to a financial planner can also help you understand your options, possible entitlements, and how to apply for them.”

The Equip Retirement Expo is designed to help you prepare for the next phase of life. Presented by Kim Watkins, these events feature talks with superannuation experts and financial planners, as well as pop-up booths where you can speak with industry representatives and discover new tools and products to deliver a happier, healthier retirement.

To register for the Equip Retirement Expo in your city, click here.