Recently, our Partner Sam Young sat down with Maria Paterakis to talk about the importance of Financial Planning for Retirement.
The SIX things everyone needs to know about their retirement planning:
1.Don’t delay. People come to see Financial Planner’s when it’s usually too late, into their 50’s and 60’s. The best time to plan for your future is in your 30’s and 40’s.
2.Get on the same page as your partner. Make sure you have a retirement planning discussion with your spouse. Having everyone involved on the same page means no misunderstandings or surprises down the track.
3.Men and women approach retirement planning differently. Generally, women tend to focus on the emotional side and want to know if they’ll be financially ok? Whereas men want the stats and numbers. When planning as part of a couple, it’s essential both points of view get taken into account.
4.Don’t listen to friends. Everyone’s financial situation is different and unique, your family structure, business interests, level of income, risk appetite etc. Which means everyone needs to have their own plan done to achieve the best results.
5.How much do I need in retirement is the million dollar question. By creating a robust plan, becoming informed and working with an expert, you’ll be in a much better position to answer this question than someone who doesn’t have adequate retirement planning.
6. Super isn’t enough. For most people, the 9% (currently) that gets put away each week into their Superfund won’t be enough to last during retirement, especially with average life expectancy increasing as well as expectations around the standard of living.
You can watch the interview here or read the transcript below.
Q: Financial planning is one of the most important things and the most important steps you can take to get ready for your retirement. And we’ve got Sam Young here from Simmons Livingstone and Associates, and he’s going to tell us a little bit about, first of all, your business and also what people need to know when they’re getting ready for that very important step of retirement and getting their finances into order.
A: I suppose the most important part with any retirement planning conversation is to start off with your budget. I think it’s very important to understand your expenses so that you can have a look at the rest of the way your assets are structured. Whether it be your savings or investment property or superannuation so that we can get a clear idea of what you’ve got going on and making sure that those assets, that you have accrued over time, have built up in a way that we can help fund your lifestyle expenses. And we’re living a lot longer than we ever have before. So getting your finances to last longer is a big step for people.
Q: Tell us what are some of the things or the scenarios that you have in front of you when you’re working with people about getting ready for retirement.
A: I think it’s important, really important, to have a good idea of what your funds can or can’t do for you. There’s plenty of different options out there whether it be through cash, term deposits, annuities, superannuation or whatever the case might be. Everyone’s situation is different.
Everyone’s situation is different so it’s getting down to having a conversation that’s right for you. And there’s plenty of different options out there so for us, our job is to make things in retirement less daunting and to give you a much clearer idea. As well as saying “hey here’s some things that you need to focus on” so that we can get to the point where we achieve what we want to achieve.
Q: So I’m guessing you have a lot of couples that sit in front of you and I’m wondering if the questions that come from men and women are quite different when it comes to planning for retirement. Do they have different values and different questions when it comes to that preparation time?
A: Very very much so. Good question. So, in a lot of the conversations that I have we work with customers whether it be husband and wife or single, whether it be a single ladies or single man, whatever the case might be.
But people’s needs, even though they’re in a relationship, can be very different and what’s important to them. I find that a lot of the important things that come from a female perspective normally is “is my partner going to be okay if something happens to me” and “if something happens to him am I going to be okay?”. I suppose it’s females who are normally in touch more from an emotional point of view.
So it’s really important to find someone who you can trust and work with to give you that comfort. From a male’s perspective often they are more about the facts and figures. “How much?” or “What return are we getting in in this scenario?”. So it’s always an interesting conversation.
I think it’s really important, especially for a husband and wife, that people are on the same page and that’s why we like to have a conversation with everyone together in the same room. Because there are different things that are important to both sides and we want to make sure that everyone’s on the same page and we’re looking at everyone’s values and needs are considered and met.
Q:So tell me what are some of the questions that people normally ask. You’ve covered some there but are there other ones where the forward planning might be easier for some people and more daunting for others for example.
A: I suppose everyone’s golden question is how much is enough or how much do I need to retire. Like I said for us when we start any retirement planning conversation, it’s about let’s get your expenses down on paper, let’s get an idea of your view of your budget. And do you know what you need to live off that governs a lot of the conversation about how much do you need to occur outside whether it be savings or age pension superannuation whatever the case might be.
So we can structure it back, so that you’re generating the income that you need to cover your lifestyle expenses. And if you’re not, well then how long does your funds look like they’re going to last. At least you can be making an informed decision when it comes to when you’re ready to hang up the boots. If you haven’t had this conversation it really is important because it helps to give you a bit more peace of mind and a bit more clarity on where you’re heading.
Q:What age do people normally come for advice? And what age should they come?
A: They come to us normally far too late. I suppose most people especially when it comes to planning we have a lot of conversations with people who are 50 to 60. Whether it be they’re thinking about retiring in the next 12 months or whether they coming in a little bit earlier with a three to five-year plan. Our job is to make sure that you know you’re saving as much money as you can on fees and making sure your saving as much money as you can on tax. And getting things like superannuation sorted.
Q: So can you tell us a little bit about the ethos of Simmons Livingstone and Associates.
A:Yes. So in our business, we want to have long-lasting relationships with clients. Everyone’s situation is different so it’s really important everybody gets tailored advice that’s right for their situation. We endeavour to do with our customers, not just give them advice, but to give them some education along the way so that they can start to make their own own decisions, and make an informed decision. And that’s all that we want. When a client is leaving in a better spot, whether it be from an education point of view or being able to make an informed decision.
Thinking “I feel good about this. Now I understand a little bit more than what I did when we walked in through the front doors”. It can be quite a complicated area and having the right advice and the right information and the right opportunity to make the right decisions for you is so important.