Retirement Planning
Retirement Planning
The recent statistics has shown that only about four percent of today’s retiree’s have an annual income of more than $36,000 in Australia.
As Amanda wants to plan for her retirement, there are some steps and considerations that she needs to address, which one of them is setting retirement goals (Taylor, 2010), for example a change of residence. There are different possibilities that Amanda can look into, for example, renting a small unit apartment as she is single and use the family home to earn rental as income. This would be a cost effective way in lowering her outflow of cash. The second step in planning for retirement is determining the expected age of retirement (Taylor, 2010). Amanda has already planned out her expected age of retirement, at age 65, which is the official retirement age in Australia. The next step is to determine her expected size of retirement nest egg (Taylor, 2010). She plans to accumulate $1.2 million in today’s dollar for her retirement. The next question would be whether there are other sources of income available to meet the requirement of her retirement nest egg (Taylor, 2010). Besides income from rental of her family home, she also has some income from dividends that she has invested in with her shares. The fifth step in planning for retirement, to assess whether there is any outstanding debt has already been answered by her. She has a personal debt of $25 000 with an average interest of 16% with monthly payments of $350. All these stated above allows Amanda to maximise her savings early to take advantage of interest such as compounding interest. Interest from savings would allow the ease for her in the future. There are other methods that she can consider, such as investing in growth products such as shares and bonds, hedging such as negative gearing and positive gearing and salary sacrifice.
Basically what is needed is to plan ahead, avoid debt and to invest and to just save. Planning ahead helps to
The recent statistics has shown that only about four percent of today’s retiree’s have an annual income of more than $36,000 in Australia.
As Amanda wants to plan for her retirement, there are some steps and considerations that she needs to address, which one of them is setting retirement goals (Taylor, 2010), for example a change of residence. There are different possibilities that Amanda can look into, for example, renting a small unit apartment as she is single and use the family home to earn rental as income. This would be a cost effective way in lowering her outflow of cash. The second step in planning for retirement is determining the expected age of retirement (Taylor, 2010). Amanda has already planned out her expected age of retirement, at age 65, which is the official retirement age in Australia. The next step is to determine her expected size of retirement nest egg (Taylor, 2010). She plans to accumulate $1.2 million in today’s dollar for her retirement. The next question would be whether there are other sources of income available to meet the requirement of her retirement nest egg (Taylor, 2010). Besides income from rental of her family home, she also has some income from dividends that she has invested in with her shares. The fifth step in planning for retirement, to assess whether there is any outstanding debt has already been answered by her. She has a personal debt of $25 000 with an average interest of 16% with monthly payments of $350. All these stated above allows Amanda to maximise her savings early to take advantage of interest such as compounding interest. Interest from savings would allow the ease for her in the future. There are other methods that she can consider, such as investing in growth products such as shares and bonds, hedging such as negative gearing and positive gearing and salary sacrifice.
Basically what is needed is to plan ahead, avoid debt and to invest and to just save. Planning ahead helps to