The concept of retiring sounds amazing, finally finishing up work for good and being able to dedicate your time to things you love to do based upon your schedule. However, for some, retirement can seem daunting, perhaps lonely, or even financially unachievable. Planning for retirement is key, and it should be driven by making methodical choices and the occasional sacrifice during your working years to ensure you can financially manage during your retirement. At some point you will stop working, and it is essential when that time comes, decisions are steered by you and not by others.

 

It is all about the 3-2-1 – Launch into Retirement
– 3 considerations, 2 action plans for 1 comfortable retirement

 

So what are the THREE considerations:
• Mortgage is paid off – your house should be free and clear, and if you still owe money on the house then keep working until it is paid off, otherwise sell it and use the equity to buy something smaller, more affordable that you can own outright. Having a mortgage during retirement can be financially catastrophic if something occurs and you can’t meet your payments.

• Bank of Mum and Dad is closed – if you are still paying university fees or helping the children out here and there, then retirement should not be on the cards. There is no doubt having a family is expensive, but for you to dedicate your resources to retirement, the Bank of Mum and Dad must be closed for good.

• Health insurance game plan – prior to retiring, you need to figure out exactly how you intend to cover the cost of health insurance once you retire. Make no mistake health insurance is expensive, therefore addressing how you intend to cover the costs will be imperative. Simply put if you don’t have a solid game plan – don’t retire.

 

What are the TWO action plans?
• Create a will – you have worked hard for the money you have made, make sure if something unexpected happens that you have a thorough estate plan. It is essential to make sure you have a valid will, that is updated to reflect your current life and choices. Additionally, make sure your life insurance and pension plans which have listed beneficiaries are updated as well. Let’s face it, most of us would like to spend every last dollar of our money earned but realistically that probably won’t happen so make sure your personal wealth is passed on accordingly based upon your terms and direction.

• Consolidate your assets – do you currently have lots of accounts everywhere, whether it be bank accounts, investment accounts and pension plans? If so, it is time to downsize and start consolidating your assets. At this stage, there is no point having money everywhere, so make a commitment to one or two companies to manage your wealth. This makes logical sense from an estate planning perspective so that forming executive decisions can be easier.

 

And lastly ONE shot to get retirement right:
Let’s face it, most people don’t retire and then do a ‘backflip’ and revert back to working 9 to 5 again. For those who choose to head back to work, it might be only working part-time hours, consulting or even volunteering their time and expertise opposed to an actual salary. But reality is you really only have one shot to get retirement right, therefore it is imperative you make sure you plan accordingly.

Thanks,
Carla Seely

 

Carla Seely is the Vice President of Pension, Life and Investments at Freisenbruch-Meyer.   If you would like any further details, please contact her at [email protected]  or call +1 441 297 8686.

 

 

 

75 Front Street, Hamilton
(441) 296-3600
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