How to Jumpstart Your Retirement-planning?

According to Benjamin Franklin, if you fail to plan, you plan to fail. As you approach your golden years, you may find yourself asking questions about your retirement plans and realise the need for a solid plan. You might have an idea of your dream retirement lifestyle but be uncertain about how to turn it into reality.

Retirement planning will provide you with peace of mind, serving as a guideline and equipping you to transition smoothly into this new chapter of your life. Having a plan helps you establish your goals and priorities before retirement, allowing you to build your ideal post-career life. This article will guide you through practical steps to achieve a stress-free retirement through effective planning.

Envision Your Dream Retirement Lifestyle

When planning for retirement, start by asking yourself: What kind of lifestyle do I want during retirement? The next question is: Can my current income support it? Once you’ve answered these critical questions, write down your priorities and goals, such as spending more time with family, travelling the world, picking up new hobbies, or joining communities with similar interests.

Planning ahead helps you prepare for and anticipate potential issues, such as needing a larger budget or savings, or planning travel in advance to avoid hassles with airline cancellations or itinerary changes. Having a clear guideline will make your transition into retirement smoother. For example, some Kiwis move to Australia during their prime years and return to New Zealand for retirement, while others might relocate from cities like Auckland or Christchurch to regions such as Hawke’s Bay or Manawatū-Whanganui to enjoy a slower-paced lifestyle.

Consider your current health and living situation in your retirement planning, as these factors can impact your plans. There’s no shame in having a vision for your retirement; creating a vision board can help inspire and motivate you to prepare for the future.

Prepare Your Finances

A study from Auckland University of Technology shows that individuals in New Zealand who feel unprepared for retirement are more likely to experience stress and anxiety. Another survey by ASB’s Retirement Confidence report found that 40% of respondents felt stressed about their retirement planning, citing insufficient savings and concerns about future financial stability as major contributors.

It’s easier said than done to start preparing for retirement with various factors to consider, such as paying a mortgage, taxes, or debt, and dealing with inflation and the high cost of living in New Zealand.

However, it’s better to start early than to regret it later. Begin by developing a financial plan and consulting a wealth manager or financial advisor to help you manage everything from insurance to lifestyle changes. If you actively contribute to KiwiSaver, review your balance and strategies to maximise your investment as you prepare for retirement.

Get Healthcare Coverage

It’s well-known that as we age, our bodies become more susceptible to illness. That’s why it’s crucial to plan ahead and secure health insurance that meets your needs. If you’re already on medication for an ongoing health issue, obtaining comprehensive healthcare coverage now is especially wise. As the saying goes, “health is wealth,” and investing in good health insurance ensures you’re prepared for whatever the future holds.

Consider exploring various health insurance options, such as those offered by  Nib to New Zealand Seniors. These insurance providers offer a range of plans tailored to different needs and preferences. It can also be helpful to discuss health insurance options with your loved ones to see what they use and get their recommendations on the best coverage for your situation.

Know Where You Will Settle Down

Where you choose to live in retirement depends on your vision for this new chapter. Consider whether you’ll be relocating or staying in your current home, as this will help you decide where you want to settle after retirement. If you picture serene days by the beach, locations such as Mount Maunganui or Napier, known for their vibrant communities and mild weather, could be ideal.

Alternatively, if city life appeals to you, Auckland or Dunedin might be suitable, offering retirement homes and communities where you can enjoy a slower pace while remaining in the city. You might also want to consider a reverse mortgage as an option. It offers several benefits, including the opportunity to access additional cash flow by converting your home equity into cash, while allowing you to remain in your home for as long as you wish.

Plan your leisurely activities

This aspect of retirement planning can be enjoyable as you think about all the activities you want to pursue or passions you want to revisit. Including these in your plan will give you an idea of the expenses involved in joining communities or picking up new hobbies. It will also help you decide where to live if you plan to volunteer or work part-time to keep yourself engaged.

Seek legal advise

Another crucial part of preparing for retirement is updating your legal documents. This includes your will, power of attorney, and records related to your assets, such as property deeds, title certificates, and land records. You should also review your tax implications and retirement income, including superannuation and pension arrangements. Although this might seem like a lot of work, seeking legal advice is well worth it to ensure these matters are handled correctly.

Have an Emergency Fund

Emergency planning should be part of your retirement strategy to prepare for the unexpected. While you can plan for many aspects of retirement, unforeseen circumstances may still arise. Having an emergency fund ensures you’re prepared for any unexpected events or health issues. It’s wise for your spouse or a trusted confidant to know about this fund so they can access it if needed for hospital bills or accidents.

Conclusion

Retirement planning may seem like a lot of work, but it’s crucial to ensure everything is in order before you retire. Starting early makes it easier to enjoy a stress-free retirement, as you’ll have everything prepared in advance. Key steps include knowing where you’ll settle down, clarifying your vision, securing health insurance, taking care of legal matters, and having an emergency fund. Planning now will help you enjoy a smooth transition into retirement and ensure you’re ready for the future.