You can avoid pinching pennies in your retirement because you haven’t saved enough money.
But you need to plan well ahead.
Figure out how much you’ll need
Start by find out how much income you will need by answering the following questions:
- What are your retirement goals?
- What kind of lifestyle do you want?
- What is your life expectancy?
While it’s relatively easy to set goals and lifestyle expectations for retirement, estimating how long you will live can be tricky but is crucial to retirement planning decisions. It can help you decide on your asset allocation or when to stop working to ensure you have enough funds for your retirement.
Although there are tools that you can use for calculating life expectancy, your financial adviser may guide you through the process. Your adviser can also help you come up with an estimate of your required retirement income based on your lifestyle expectations, risk profile and life expectancy.
Ensure you’ll have enough income
With an estimate of how much you’ll need, your adviser can make recommendations to help you meet your required retirement income. These may include growing your retirement fund by investing some or all of it.
Investment products carry risks. It’s important that you choose instruments that suit your risk appetite and need for returns.
If you prefer to have a regular and stable flow of income in retirement, there are options available for you. Seek professional advice on how this can be done and how you can get appropriate outcomes.