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How do I Secure My Income for Retirement?

When you are young, retirement is hardly on your mind. But like most Aussies, if you intend to retire between 65 and 67, you will need to have a proper retirement income plan in place. A well-planned retirement assures financial security in your golden years, which is all the more necessary with increasing lifespans and growing job insecurity.

Planning a steady income for retirement may seem daunting, but it doesn’t have to be. Whatever your retirement dreams may be, there are many ways to build a fixed income that supports your lifestyle.

In this post, we’ll help you understand how to plan your retirement income stream.

Let’s start.

Start Early

According to the Association of Superannuation Funds of Australia (ASFA), an average single person retiring at age 67 who seeks a comfortable lifestyle needs a retirement income of $48,074.77 a year, and couples need at least $67,049.86 a year. It’s easier to secure this income if you start planning your retirement in the early twenties.

For one, it reduces your financial stress, allowing you to set aside a budget for your retirement income without stretching your resources thin. Secondly, it helps your investments grow substantially over time thanks to the power of compound interest.

Another benefit is it allows you to pay off your debt early, ensuring a debt-free retirement. Early planning also helps you plan big-ticket expenses like your kid’s education, property investment, and healthcare without added stress.

Set Your Retirement Goals

Everyone dreams of a different retirement. While some aim to live modestly, others may want a more comfortable or high standard of living. Having a clear idea of what your golden years should look like helps you plan your retirement properly.

When planning income for your retirement, consider your:

Living Costs: What will be your daily expenses after retirement? This includes expenses like groceries, utilities, housekeeping, and food.

Healthcare Costs: Do you foresee any significant health expenses? You may not have any health issues at a young age, but you might need regular medication when you retire. Be sure your healthcare plan can cover these costs while your retirement income can pay for out-of-pocket expenses.

Leisure Activities Costs: How often do you plan to travel or eat out after retirement? Perhaps you want to take up piano lessons or learn to paint. Whatever you plan to do, factor those expenses in when planning your income for retirement.

Create Your Retirement Savings Plan and Stick to It

Once you know how much you need to set aside for retirement, you can create a savings plan. Whether $100 or $500 a month, whatever you decide to save, stick to your plan. Financial discipline is critical for planning your retirement.

Here’s what you can do to stay on track:

Monitor Your Expenses: Track all your daily expenses, even if a nickel and decide where you can cut back. Goodbudget, WeMoney, and PocketSmit are a few apps you can use to track and manage your daily expenses. Remember, money saved is money earned.

Start Investing: Set aside a specific portion of your income for retirement savings and investments. It can be 10% or 20% of your income, depending on your retirement goals. But while doing this, make sure to pay off your debts like car and home loan and credit cards. This helps you retire without any unrealistic financial commitments.

Don’t Put All Your Eggs in One Nest

Diversification is the cardinal rule of retirement planning. Don’t put all your income for retirement in one savings account or retirement plan. Diversify your investments as much as possible. It lowers the risk of your portfolio because different assets do well at different times.

Some of these options include:

  • Superannuation: It is considered the best income stream for retirement, with nearly half the retirees in Australia (48%) relying on superannuation in 2023. As this is your primary retirement savings account, you can invest more in your Super to benefit from compound growth.

    Usually, your employee will contribute a portion of your fortnightly wages to your Super directly. But we recommend you choose the amount as it will help you meet your retirement goals.

  • Real Estate: Real estate can also serve as one of the best income streams for retirement. Unlike shares and mutual funds, real estate is a relatively stable class of financial assets. Plus, your investment property can fetch a higher value over time. Although you may have tax obligations, you can benefit from this investment in different ways.

  • Sale: You can decide to sell your property once you retire, which provides you with a lump sum retirement income.

  • Rent: Alternatively, you can rent your property and build a steady retirement income stream. You can use this regular income to pay for your living expenses or retirement activities.

Stay Informed and Adapt Your Plan

Planning income for retirement is a long-term goal, meaning you will need to keep up with the changing market trends, economic conditions, and personal circumstances. Every quarter, you can review your investment portfolio and see if you are on track. You can modify your investment strategy according to the changing market conditions and your finances.

Why Choose My Money House?

All you want is to have a good lifestyle in your retirement. So just how do you secure your income so that you can use it in retirement. My Property House can assist you with purchasing an Investment Property that can secure your income in retirement.

My Property House have a range of investment property packages that include residential properties in popular Australian suburbs. Property is a secure investment in the long term, is relatively simple to understand, and easy to leverage. My Property House can assist you to create a property investment portfolio by:

  • Teaching you to understand property as an investment.
  • Helping you in setting your budget and understanding your financial capacity.
  • Providing research and information on specific properties and their potential return on investment.
  • Guidance in understanding the numbers including cash flow, equity, negative gearing, and tax benefits.
  • Ongoing access to a team of professionals who can research the property market, and find you the best property and loan to suit your needs.
  • Manage your property portfolio to ensure high rental returns.

Talk to Our Property Investment Experts

Everyone deserves a comfortable, stress-free retirement, which begins with careful planning. If you start early, set your investment goals, maintain financial discipline, and diversify your investments, you can turn your dream retirement into a reality.

MMH Group can help you strengthen your retirement income plan with property investments. For more information about property investment and building your own property portfolio book a strategy session today.