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Preparing for retirement successfully

The hard questions are important for people preparing for retirement. Otherwise, they risk failing to achieve their desired quality of life.

Many senior executives leave the hard questions about their finances until late in their career, when they have a health issue, or when they’re ready to retire. At this point, unless you’ve planned carefully in advance, the choices may not be attractive.

For many, the choice is between retiring immediately on a lower income and a lower standard of living than expected, or continuing to work for at least a few more years to achieve their desired retirement lifestyle. For many executives looking to retire now, the prospect of working longer is distinctly unappealing.

Traditionally, a six-figure income virtually guaranteed a comfortable retirement but that’s no longer the case. Spiralling costs of living, soaring house prices, and a new focus on Australians becoming self-funded in retirement means the stakes are high and it’s crucial to address financial issues sooner rather than later.

However, these questions can be hard to ask and even harder to answer, especially if you suspect the answers won’t be completely positive or if you’re comfortable on your current earned income. Most people find dealing with money stressful, even when things are going well.

Being honest, regardless of the situation, will empower you with key information that lets you take control of your financial future when the earned income stops. Being bold and asking those hard questions now could be the difference between being able to achieve your desired standard of living in retirement or not.

Asking the hard questions can result in a voyage of self-discovery. For some, the realisation that they’re in better financial shape than they realised can be freeing. For others, new knowledge can help them develop a realistic and achievable financial roadmap that will set them up for a better retirement than they could have achieved if they’d avoided the hard conversations.

A good roadmap should include important steps that many people don’t consider until fate intervenes. This includes topics such as succession planning, exit strategies, investment structures, estate planning, the ideal retirement lifestyle, and important funding tools. This leads to smarter financial decision-making.

Planning is possible and desirable no matter how complex a person’s finances are. The first step is to identify the ideal retirement lifestyle and allow for living a long retirement. It’s then possible to calculate the capital and income required to finance this lifestyle.

Successfully planning for retirement is easier and more effective if you work with a trusted adviser. They can help you navigate the different funding tools available and keep your retirement plan on track. It’s important to work collaboratively and consistently with advisers, updating the plan as circumstances change, including market performance and economic conditions as well as your personal situation.

Gaining advice from an experienced, knowledgeable adviser will help anchor your efforts when the going gets tough, and give you a greater sense of purpose, direction, drive and passion. It will also give you the greatest chance of achieving the retirement lifestyle you expect. However, it can only be done by asking and answering the hard questions now.

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