10 Point Health Check if you plan to retire in the next 10 years.

Most people who are coming up for retirement hope that they will have enough to get them the life that they want. But many of them don't really know if they'll have the money to last them the distance.


If you're planning to retire in the next 10 years or so, then this'10 Point Health Check' will help you move forward with confidence. Consider it the start of your pre-retirement planning.

1. Make a list of what you want.

Do you have any travel plans, big purchases in mind or lifestyle changes that you want to make? Now is the time to make up your 'Wish List'. Most people have worked hard all their lives and made plenty of sacrifices to get to where they are today. This is the time to start thinking about those items you intend to buy, the experiences you want to have and the freedom of time that comes with a well-funded retirement.

2. Make a plan for how to get what you want.

Would you travel to a place you've never been before without knowing how to get there, how long it will take and what you will need to take with you? Most would answer 'No' - although, there are a few brave souls out there that are looking for exactly this kind of adventure. When it comes to retirement though, the majority of people I've worked with take the occasion pretty seriously and want to know that they're going to be OK. Plan it out ahead of time and prepare a pathway into your retirement. You'll know what you need to do now to get what you want then - it will make all the difference.


3. Know where all your money goes.

Many people have a budget to help them know how much money comes in and goes out. Most people like it. They want to feel secure that they're spending appropriately and not more than the amount of money they're bringing in. It can be a fairly tedious task though and I know for some people that this job of budgeting causes a bit of anxiety. Knowing where you spend your money is really important, especially in the lead up to retirement as having the ability to save so you can pay off debt and add to your super fund or investments is more crucial than ever at this point. Set up a system to manage your money easily and make the process serve you better.

4. Fix 'The Gap'.

As a kid, I remember being told that 'What you want and what you get are two different things' - and it was usually in the context of dinner. But I've come to realise in my adult years that there's also some truth to this old saying in life and in the context of your retirement, there are also ways to close 'The Gap' between what you want and what you'll end up getting. Most common retirement planning strategies involve getting as much as possible into your super - which I support because who doesn't like a tax-free super pension in retirement right? But there are also others. If there's a gap between what you want in retirement - those things on your 'Wish List' - and what you are likely to get then you'll need three things - the ability to save some money, some form of investment and some time to grow it.


5. Get out of debt now.

If there's ever an area that erodes your potential to save for retirement it's this - debt. Yes, there's 'good debt' and 'bad debt', however, your mind still knows that owing money to anyone casts a shadow on the retirement horizon. Although getting out of debt is a good thing in general - this area can be a little grey as there are many factors to consider. It might be pretty clear that paying off your home loan or credit card debt is a great idea - and the sooner the better - but should you rush out and pay off your investment debt? Or should you sell your asset (investment property, shares etc) to clear any debts? There are a few things to think about on the investment side of debt such as lost tax benefits while you're still working, Capital Gains Tax (CGT) when you sell your investment and also losing any future growth of the asset. While clearing your debt is ultimately a good thing - what kind of debt you have, when you should sell it and how you should do it needs to be looked at seriously.


6. Build dependable reserves.

Cash savings. Money in the bank. Risk-free and readily available when you need it most. This gives most people financial confidence as much a large share portfolio, rental property and their super fund balance does. There's something about having control and money that's not at risk of a large market downturn. Cash is safe but it doesn't earn much of an interest return these days. And investments build wealth over the longterm. It's not one or the other - you need both. Both cash savings and market-linked investments will help keep your retirement boat afloat and having ready access to dependable financial reserves will give you peace of mind and confidence in the day-to-day. Start saving now and build up your dependable reserves for retirement.


7. Get your Will all sorted.

You should go into retirement with all the 'heavy lifting' done well before. Having your Will, Enduring Power of Attorney and Medical Power of Attorney in place so that you and your loved one have full legal control is a must. Studies show that at least 45% of Australian's don't even have a Will. This means that almost half the nation runs the risk of losing control over their estate because they do not have a legal document that sets out who they want to receive their assets when they die and in the most tax-effective manner. If you die without a Will then you have no control over how your assets will be distributed - and in some instances, your estate will actually pass over to the government. There are many examples of people unintentionally passing their assets on to ex-partners or their Will being contested by feuding family members. This is a sad and messy situation and one that's totally avoidable when you take control with some solid estate planning.


8. Review your personal insurances.

Private health cover, Life insurance and Medical trauma insurance are just some of the types of insurances where the costs get more expensive the older you get. Why? Because an insurance company knows that you're more likely to make a claim as you get along in years and the insurance premiums are linked to those statistics. I'm not saying that you shouldn't be insured - in fact, the opposite, keep what you've got as you may not be able to replace it. All I'm saying is to at least review the type of cover you hold, how much it's costing you and what kind of benefit you're getting. If your situation no longer requires that you hold as much cover as you currently do, then you can trim it down a little. Saving some money here means there's more you can add into your retirement fund.


9. Take care of your health.

Retire with your physical, mental and financial health in good order. Sure, there's likely to be some changes in your physical health over the years if you've neglected some of the basics for decades. But do what you can with what you've got. The last decade before retirement doesn't have to be a path downhill in terms of your health. After all, you can't retire well when you're sick - and preventable medical costs will be a drain on your retirement savings. Get good sleep, eat nutritious and delicious food and the big one - exercise. Get a sweat up. Remember this, just like managing your financial health - small changes today will make a big difference over time.


10. Consider these other important areas likely to occur in your retirement years.

Inheritance: Some people have a very simple view on retirement planning - live it up today, outlive their parents and collect their inheritance. While there's no doubt that an inheritance would give a welcome boost to top up your retirement it shouldn't be your Plan A. Some would even consider that thinking about a potential inheritance in advance of a parent's passing as something distasteful. However, I would think that planning for a family legacy for future generations may even be something exciting/inspiring to the family patriarch or matriarch if done in the right spirit ahead of time.

Age Pension: We are fortunate in Australia to have a social security 'safety net'. While some would try to abuse this system - it is the financial saviour to many who for one reason or another were unable to provide private funds to support themselves for the remainder of their lives. I come from a family where grandparents on both sides of my family were financially supported by the Government Age Pension. They were able to make their retirement years work - but it was a frugal lifestyle to do so. Many will be partially supported by an Age Pension entitlement when their asset values reduce over time, again it would be a welcomed income top-up to meet living expenses, but again, this shouldn't be your Plan A. It would be much better for you to be a self-funded retiree with all the options and lifestyle benefits that come with this.

Caring for an aged parent: I don't know many people who have a goal to care for their frail parents while in their retirement and yet, this is what happens - often. When it comes to aged care needs for elderly parents there's a myriad of options and costs that will need to be decided on and you will be part of this mix at some level. Perhaps you would like to be on the frontline and help Mum or Dad financially, so make sure this is planned for in advance and that you source some good advice to steer you in the right direction.

Let's talk

Now's the time to tidy everything up, to bring it all together in one place - all your income, expenses, debts and the things your own. Know what you have and what you need to do. When you start to measure things - things start to change. And for the better. Contact me if you've got any questions.