“Will my money run out?” – It’s the question that keeps retirees and pre-retirees awake at night!

Money is the number one cause of stress and for many that stress is magnified once they stop working. That’s because once someone retires, it’s highly unlikely they will ever go back to work and therefore what they have when they retire needs to last them the rest of their lives.

On a side-note, can you see why taking this stuff seriously long before retirement is on your doorstep might be a good idea?

The thing about retirement is that many people just get it completely wrong. Some spend too much in the early years and then run out of money way too early… the average Australian will spend 23 years in retirement but run out of retirement savings after 10. Sadly, many see their retirement savings evaporate immediately because they need to use their superannuation to pay out the mortgage. At the other extreme, some spend much less than they could afford to spend for fear of running out of money and therefore deprive themselves of so any things they would have liked to have done.

The reality is that most people don’t know how much they will need for retirement, they don’t know how to create wealth for retirement and when retirement comes, they don’t know how to invest their money to make it last.

There are a few key things to know:

-        When you’re a long way from retirement you can use time to your advantage and invest more aggressively to make money

-        As you get near retirement you need to take the foot off the accelerator

-        When you do retire, life doesn’t end, in many cases it begins… that’s why it’s so important to invest some money for the short-term, some for the medium-term and some for the long-term.

In my role as a financial adviser, I often meet clients who don’t want to lose any money… invest too conservatively though and inflation will destroy the purchasing power of your money. I meet others who want me to get them a huge return…invest too aggressively and the next Global Financial Crisis wipes you out! 

The key to successful investing is investing money in the right assets for the right timeframe.

Do this and you get the best of everything – capital security on the money you’ll need in the short term and growth on the money you will need in the long term. 

The benefit of a carefully laid out financial plan that’s reviewed on a regular basis is going to bed each night with peace of mind. With good strategy and planning you need not be troubled by the question “will my money run out?”.

I’ll leave you with two questions to ponder:

·       Where will the money come from?

·       What future lifestyle are you going to be able to afford?

If you’re not sure of the answers and you feel like creating a financial plan is something you need some help with, then let’s start a conversation.

Cheers,

Daniel

If you’d like to find out more about how INDEPENDENT financial advice could help you manage cash flow, pay off the mortgage faster, get the most out of super and invest wisely, then get in touch on 0411 484 464 or head to wealthtrain.com.au.

Daniel McGregor is the man behind Wealth Train and is a member of the Independent Financial Advisers Association of Australia. This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided are general advice only.