Retirement planning is the process of arranging your finances so that you can achieve your financial and personal goals in retirement.

It begins by defining your needs, objectives and current situation. Once these are established, your financial planner will prepare a broad strategy based on your goals. On your approval, a comprehensive financial plan will be implemented. This plan will take into consideration your current needs as well as plan towards meeting your retirement objectives.

Do You Need Retirement Planning?

When you consider that you could spend around one third of your life as a retiree, you start to realise the importance of having an effective retirement plan.

Your retirement payment is likely to be one of the largest lump sums of money you’ll ever receive. Whilst it may be tempting to use it to pay off the mortgage, go overseas or invest in the share market, you should carefully weigh up your options before deciding what to do. After all, this money has to last you all of your retirement years.

When you work out what to do with this money you also need to consider issues such as the taxation implications and the effect of your decisions on your ability to get the aged pension.

Individual circumstances differ and many of these issues can be complex and confusing. It’s therefore best to seek professional advice to make the most of your retirement payment. This is where retirement planning comes into play.

You should be free to spend your well-earned retirement doing the things you’ve always dreamed about. With the assistance of your financial planner, your retirement could include some of the best years of your life.

What Are the Benefits of Retirement Planning?

By putting in place a suitable retirement plan you increase the likelihood of living a financially secure retirement – maximising the returns on your investments as well as your eligibility for any social security entitlements.

Effective retirement planning also helps you take advantage of taxation benefits specifically established for retirees, such as:

• tax rebates;
• higher tax free thresholds; and
• zero taxation on earnings while funds are held in certain retirement income products.