A financial plan is the first step

Many people don’t get a retirement plan and assume that their super will cover their retirement.

04 Jun 2018

While many people realise that a good financial plan is important, the reality is that many people don’t get a retirement plan and assume that their super will cover their retirement.

Considering that they are making (or not making) a decision that will have a major effect on the rest of their life, one could say that this was a pretty casual approach. Even if you suspect that you won’t have enough to retire on, it’s still a much better idea to get a financial plan so that you’ll know where you do stand. This way, you and your financial advisor are in a position to do something to improve your situation. It’s a good idea to get a financial plan done by the time you’re in your 40s or 50s, as you then have time on your side. If you haven’t got one yet, today is the best time you have to make a start.

While we cannot over emphasise the importance of a good financial plan, it is only the first step towards a comprehensive retirement plan. If you are going to maximize your chances of enjoying a happy, secure and stress free retirement, you need a total retirement plan.

Most people would be aware of what a financial plan is. There are thousands of financial planners who can produce one for you. If you have a financial plan, you have made a good start, but you aren’t there yet. If you don’t yet have a financial plan, we suggest that you (and your partner, if you have one) work on developing a basic lifestyle plan before you talk to a financial planner.

A lifestyle plan encourages you to think about a lot of the non-financial issues which affect your everyday life. We have talked about a lot of these in earlier chapters and they include subjects like your relationships, future working plans, travel plans, where you will live, to name a few. When you know what sort of lifestyle you want to achieve when you leave full time work, you are in a better position to talk to a financial planner about how much money you will need to fund your new life. Think about it – it’s not much fun being financially secure if you are unhappy with your lifestyle.

There are also a range of legal issues that really need to be considered. In most cases, a will just isn’t enough protection in these days of family court litigation. Things like a testamentary discretionary trust, enduring power of attorney, advanced health directive, superannuation death benefit nomination and retirement village leases should at least be discussed with a solicitor familiar with estate planning. A family fight over a deceased estate is one of the worst legacies that you could leave.

We suggest that you talk to your financial planner and solicitor about your desire to have a comprehensive retirement plan, where your lifestyle, financial and legal plans are integrated as far as possible.

'This article originally appeared in the book ‘The Rest of Your Life – How to make it as good as you want’ by Paul McKeon and Neil Tucker and has been reproduced with permission from Paul McKeon of Baby Boomers Life Change Pty Ltd' 
Commonwealth Superannuation Corporation has partnered with Industry Fund Services (IFS) to make financial planning services available to help our members get ahead.
For more information visit CSC Financial Advice or to book an appointment call 1300 277 777.

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