How do I know if I have enough to retire?
Hey there,
Being worried about retirement is normal, no matter how far away you are from it.
The dream is to retire early and the nightmare is running out of money.
Now before you get your knickers in a knot, like everything, there’s a spectrum.
Contrary to what some people think, there simply is no golden figure.
Everyone plans to live their lives out in different ways with different priorities.
?
You are probably looking at your retirement through the lens of your current lifestyle.
Many of the expenses that you have now might not exist in your retirement life.
Let’s take kids for an example! If you have children of school age, you would pay school fees.
They won’t be in school forever and hopefully you won’t be paying school fees in retirement.
Boom! One less expense to worry about.
That could be thousands back in your pockets that you didn’t account for.
Even then, it can be a scary thing to live out the rest of your life with no steady income.
So let’s find out what your financial freedom figure might look like.?
Just 4 steps.
Step 1 is to figure out what assets you have and assess your net position.
That means the value of things like your investments, bank balances, super, maybe even valuable art!
They key is to be realistic, the last thing you need is to come up with a generous number and then you really do run out of money!
The monetary value of all of those items is what we are looking for.
Once you have done that, we move on to those debts.
Step 2 is where we start tallying up those debts that you’ve got.
I’m talking about the home loans, the car loans, credit cards, personal loans.
No point in talking about all the money we’ve got, if we don’t talk about the money we owe.
Subtract that number from the assets figure we had.
Congratulations, you’ve just figured out your net asset number!
Moving on to step 3!
Now I promise there’s not too much more maths to go.
Step 3 is to figure out 7% of this number.
Why 7%?
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If we draw 7% of that net asset number every year, that is the amount of income you can draw every year for 50 years before the money runs out.
This is assuming the investments grow by 5% per annum.
Then our last step is to reverse engineer this number.
We have our financial freedom figure, so let’s structure our assets so that our 7% of income is possible!
?
If you made it this far, you are a trooper!
Don’t have time to do this today?
Favourite this email and make a note in your calendar to come back to it.
So you can calm the anxiety for a little bit.
Confused?
Message me!
Rather than sitting here stressing about your future, it’s time to take action right now.
I’d love to see how we can help you.
It could be tailored financial advice, but it could also be brushing up on your money terms through a?money course.
Everyone is different, but it's time to get to it sooner rather than later.
Hope to hear from you soon!
Until next time.
Steve.
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P.S: Whenever you're ready, there are three ways I can help you…
1.?Did you know that every year, Australians are paying their bank thousands of dollars more than they need to on their mortgage? Many folks don’t realise they’re sitting on home loans year after year that are not the best fit for their situation.?
If you want to know if this might be you, book a free 15-min call with our mortgage broker Eddie and he can make sure you’ve got the best loan for your situation
2.?Also, if you haven’t seen the latest video trainings our team has done on:
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You can find all 6 videos here:?
3.?And if you ever want to get some 1:1 help with your personal finances, we can jump on the phone or on Teams for a quick clarity call and find out where you are right now, where you want to be with your money and lifestyle, and if we can help or not.?
We can then make a roadmap for the next best step for you to take to get closer to your financial independence.
General advice disclaimer: The information contained within this post is general in nature and does not take into account your personal circumstances. Please reach out if you wish to discuss your personal situation.