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5 critical planning tasks everyone needs to complete before retirement.

5 critical planning tasks everyone needs to complete before retirement.

The closer you are to retirement, the more care you need to take with your financial decisions. The sooner you plan the easier it is to get things right. Here are five planning tasks everyone should do before they cease working.

  • Know how much money you need

This is the amount of money you need in investment assets to live the life you want without having to work anymore. First, you must figure out what your ideal life looks like. Your ideal retirement may have. Travel, Entertainment, Time with family, Sporting activities, and Eating out. It must also include the necessities like Housing, Food, Transportation, and Other bills. You can’t forget about Longevity, Inflation, Taxes, and Healthcare expenses. You need to account for all of these expenses when figuring out how much money you need.

  • Review your current investments

You need to take an in-depth look at your current investment strategy. What determines the rate of return on your investments is your asset allocation. This is the amount you have invested in growth assets like shares and property and the amount you have in defensive assets like cash and fixed interest. You need to have an understanding of where you are currently allocating your money among different assets and make changes if this is not appropriate for your individual circumstances. Taking on unnecessary risks can be detrimental to your portfolio.

  • Review the fees and costs
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It is good to check your portfolio regularly and review the fees and costs. Paying higher fees than you need to adds up to be a huge difference when compounded over time. How often you check it will depend on your current investment strategy. You also need to check to see if your portfolio is growing compared to other similar portfolios. If your portfolio is doing poorly, you may need to make changes, and saving money on fees is an easy win.

  • Complete cash flow projections

Having a detailed plan with future cash flow projections on how you will spend your money now and in the future provides you with clarity and peace of mind. You don’t need to have the exact details as life changes over time but having a conservative projection of what you will spend your money on is important. Having a projection on how you are going to fund your lifestyle helps you make big financial decisions.

  • What can you do to boost your retirement funds?

There are a lot of different concessions available to save tax and boost your retirement savings. Taking advantage of what’s available means you are boosting your savings by saving tax, that’s a win-win! What concessions are available depends on whether you are an employee or self-employed so getting professional advice might be well worth the fee paid.

In summary

You must have a plan in place for when you cease work. Having a plan on how you will handle your finances and having the right investments is important to put in place as early as possible. Having a quality investment strategy ensures that the money you have will last you for the rest of your life. It might be well worthwhile getting help from a financial advisor.

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