Retirement planning eases anxiety

Does the thought of retirement planning cause you (financial) anxiety?

Retirement planning will help you understand the pathway to your chosen destination – and lessen your anxiety about getting there.

Planning is a process that helps to take the strain out of issues and events that might otherwise be challenging. Good planning will take into account all manner of potential crises, windfalls and opportunities.

Thinking about retirement can raise anxiety about the financial capacity to fund a comfortable lifestyle in that stage of life.  There are a number of factors to contemplate when considering retirement: longevity is one that is uncomfortable for most. Some of the retirement planning anxieties can be eased with –

• adequate planning,
• careful allocation of financial resources, and
• starting the process early enough.

Through realistic retirement planning, any level of anxiety should be reserved for pondering those activities on your bucket list that will keep you occupied in a post-employment world. Because of it, your financial position should be clear, understood and embraced – and with peace of mind about funding retirement.

What are the financial issues that could influence your retirement planning?

There should only be two situations where the financial planning for your retirement could be disrupted.  Both are commonly encountered –

1. earlier than expected retirement (because of redundancy, business failure, family ‘circumstance’ – or ill health); and
2. a severe market downturn close to the end of the pre-retirement accumulation phase of your working life.  You may have heard of it, as ‘sequencing risk‘).

If your anxiety is over an unexpected early retirement, that can be eased by –

• financial planning¹ –  and
• implementation of an appropriate wealth accumulation strategy, supported by
• an asset protection strategy. Whilst the sequencing

A sequencing event issue is difficult to predict, and not particularly well able to be managed.  A diversified investment strategy² should ease some of the risk of loss at other inopportune times.

What financial resources are available for retirement planning?

There are a number of resources available to fund retirement: these include –

• Existing accumulated wealth, including within superannuation;
• Superannuation accounts themselves; and
• Centrelink pensions/ benefits.

Your planning may involve any one (or any mix of) these three categories. We have provided links above, to sources of information about features, benefits or tips in dealing with each of them.

Overcoming the impact of the above-mentioned disruptions to retirement planning..

Where retirement is brought on earlier than expected, family ‘circumstance’ is potentially going to have the most significant financial impact. Strategic planning to mitigate the effects of the other matters mentioned, include –

• Redundancy.  Should be covered by a financial entitlement that could contribute towards the funding of retirement brought on by that event;
• Business failure:  In the case of an ‘own business’ scenario – should, with adequate and appropriate asset protection strategies in place, leave some funds for retirement; and the
• Ill health situation:  This should be adequately provided for by an appropriate and strategically developed insurance portfolio.

The ‘sequencing risk’ scenario is one that confronted many ‘pending retirees’ at the onset of the 2008 Global Financial Crisis.  As indicated in the linked white paper from an Investors Mutual Limited (IML) portfolio manager, there are some investment strategies available that help to minimise the impact of this particular investment risk.

One increasingly common response to then effects of financial setback at or near retirement is to work longer. Another response sometimes relied on, is to vary the lifestyle goals in retirement.  For goal revision to be a valid solution, adequate available  recovery time allowing for age and income circumstances is required.

Replacing retirement planning anxiety with peace of mind..

Times of the year when the ‘R’ word comes into stronger focus and people start contemplating their future retirement are:

• towards the end of the financial year; and,
• towards the end of the calendar year.

The experienced advisers at Continuum Financial Planners Pty Ltd are available to meet with you, to –

• review your needs, goals and objectives; and to
• recommend strategies for you to optimise your retirement opportunities:

‘we listen, we understand; and we have solutions’ which we deliver in personalised, professional wealth management advice.

You are invited to visit the About Continuum section of our website and then, to arrange an obligation-free appointment to discuss how we might be able to help you –

• phone our office on 07 3421 3456; or at your convenience, use our
• linked Book A Meeting facility

¹ Continuum Financial Planners Pty Ltd has posted a number of articles on early retirement: to find some that may be of interest to you, search the phrase ‘early retirement‘ at this link.
² The Continuum Financial Planners website Library article about investment ‘Risk and Reward‘ provides some helpful tips in this regard.