7 Retirement Blunders to Avoid In Your 50s
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As you approach your 50s, retirement starts to become less of a dream and much more of a reality. When you run your own business, this could signal the time when you start thinking about winding down and taking a step back, so you can enjoy the fruits of your labours.
With most Australians seeking retirement in their 60s, choosing to retire in your 50s gives you a lot of options to help you prepare and plan for your retirement.
But while you’re probably thinking about all the things you could do, what about the things you shouldn’t do? Take a look at these 7 retirement blunders to avoid in your 50s.
1. Not thinking about retirement early enough
Compared to the pension age of 66, your 50s can still feel like a young age to think about retirement. But a lot can change between now and then, and factors like your health or relationships could impact your finances and your lifestyle. While you may expect to continue working into your 60s, you should consider what would happen if you need or want to retire earlier, so that you can start working on getting your savings and investments in shape.
2. Not having a financial plan
A lot of people put off their retirement planning, not wanting to think too much about the future. However, having a financial plan is a must to help you plan for the retirement you want. From working out your retirement expenses to factoring in potential health issues, it’s good to plan for different eventualities to help you establish what you’ll need to retire. Creating a financial plan will help you set goals and plan an exit strategy, helping you to feel prepared and excited about the next chapter.
3. Still carrying debt
Dealing with debt as you near retirement could impact your finances. Having to pay off debts when you could be saving or investing could impact your lifestyle more than you realise. If you’re carrying debt, make a plan for how you’re going to pay them off. You should also analyse your income and outgoings if you continue to rely on loans and credit cards and make some changes to your financial habits.
4. Closing down your business instead of selling
When you run your own business, approaching retirement can mean winding down and closing your business. But could you be missing a golden opportunity by choosing not to sell? Getting a business valuation can help you see what your business is worth, and might just make you think twice about closing down. Selling your business could help you enjoy a more comfortable retirement, and could even help you retire earlier if you choose. You can learn more about business valuation in this video:
5. Being disorganised with paperwork
As you approach retirement, it’s important to get your paperwork in order. From taking care of estate planning to details of assets and investments you may have, it’s time to get organised. As most account information is digitised today, you should aim to keep electronic copies of important documents so that they can be found and referenced easily.
6. Playing it too safe with your investments
All investments carry an element of risk, and while you’re right to be cautious about investing your hard-earned money - you could be missing out by being too risk-averse. Even after you retire, there is still time to make some investments and get some significant returns. So if you think you’ve left it too late, book an appointment with a licensed financial planner to review your situation.
7. Misjudging your pension entitlement
It’s important to keep on top of pension changes. Australia has strict guidelines for income and assets that determine how much pension you’ll get. It’s best to double-check your entitlements to make sure you’re not planning for money that doesn’t materialise.
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There are a lot of things to consider when planning for retirement, and while it can feel overwhelming, there is a lot of help out there to give you the support and advice you need. If you’re interested in a business appraisal to aid your retirement planning, Benchmark can help. Find out more about our business valuation services and start planning for your future.