How to develop your retirement countdown
Retirement is supposed to be one of the most enjoyable phases of our lives, but if we haven’t planned it correctly is can end up being a period of prohibitive frugality. To help ease the transition, we’ve developed a five-year countdown to retirement, based on some of the advice offered in Dr Bruce Manner’s Retirement Ready handbook.
Follow this advice and the transition will be as seamless as possible.
Five years before retirement
Aside from thinking about what you might be doing in your retirement and how you’re going to want to be covering any extra costs associated with ageing, this is really the period where you want to be clearing as much debt as possible.
Dr Manners recommends seniors clear as much debt as possible, as soon as possible, writing, “Becoming debt-free begins with high-interest credit card debt. If you have a mortgage, you will not want to take it into your retirement – this might mean extra payments to retire it. However, make sure you work out what gives you the greatest advantage. Sometimes getting rid of your mortgage might not be your first priority.”
One year before retirement
Putting an income stream together in place is key, and you will want a regular income stream to cover ongoing costs. Dr Manners says, “This is the time to work out what this looks like and how it will work – and how it will be set up. That process will also tell you if you are eligible for an age pension. If possible, plan to begin and keep enough money in an accessible account to cover your expenses for free to six months in case of emergencies.”
Three months before retirement
It’s time to put the finishing touches on your retirement plan, dotting all your i's and crossing your t’s. This is the time to sign up for the age pension with Centrelink, as it can sometimes take a while to come into effect.
Do you think this retirement countdown is useful?
Related links:
How much money you need for retirement
How to ensure you won’t outlive your savings
Retiring overseas not necessarily a pipe dream