Retirement planning is about replacing your main source of income once you stop working to fund all of your income needs.
There is considerable debate on the amount of income that people require in retirement. A number of factors influence the answer to this perplexing question. But most importantly, the answer lies in what type of lifestyle you would like in retirement, and importantly, what lifestyle can you afford.
The amount of retirement income you need is influenced by the lifestyle you would like to have, whilst the level of income you will receive will be determined by:
- the amount of capital you have to invest to produce an income (such as superannuation),
- your willingness to allow your capital to run down during retirement (as opposed to preserving all or part of it to pass on to the next generation),
- your eligibility to receive Government benefits to supplement other income you may receive, and
- the length of time the income will be paid for.
Retirement income planning is very much influenced by your personal needs and circumstances. In order to plan for your retirement income, the earlier you start the better. But whether you have retired now, or are not planning to retire for another 20 years, a visit to a financial planner can be the difference between just surviving and living life to the fullest in retirement.
