If retirement isn’t looking quite like you thought it would because of recent market events, there are some options that might help to get things back on track.
Stock market volatility as a result of COVID-19 (coronavirus) has given a number of Australians reason to worry about their retirement. Despite the uncertainty that recent changes in global markets may cause, there are some steps to consider taking that might help get your retirement goals back on track.
Know how long your savings will last
The first step is to know where you stand. Understanding the difference between an ideal number and where you are now will help you work out the course of action that best suits your circumstances. Start by looking at a general savings guidelines for modest and comfortable retirement lifestyles, then make use of AMP’s retirement simulator to plug in your own details and start preparing a revised plan, if need be.
Could you reduce any costs?
If possible, start by thinking about making smaller lifestyle compromises that will help keep money in your account. Reducing spending on takeaway food, recurring subscriptions and memberships can help towards improving a financial situation. Creating a fixed budget to stay on track means having that takeaway brunch, but only by cutting back on something else.
Also consider essential living expenses. Look into switching providers for electricity or gas to save on non-negotiable bills. Check the fine print of credit cards to understand what fees you’re paying. Try collating a click-and-collect order at the supermarket to help cap weekly spend and lessen spontaneous purchasing.
Is it the right time to downsize?
Some retirees opt to downsize - selling a larger family home to buy a smaller, cheaper option – for lifestyle reasons1 but there can be financial benefits, too.
One benefit can be increased cash flow. Selling an existing home releases any equity that may have built up over time. By purchasing a smaller, cheaper home to live in, money left over might be used to increase cash flow or add to savings. Moving costs and other taxes and fees may apply, so it’s important to weigh up the pros and cons before making a decision.
Consider new ways to earn income
It may seem counterintuitive to think about working again during the golden years, but it doesn’t have to mean returning to a full-time career. A small part-time or casual job could help to ease cashflow pressure, but check with the ATO or a financial adviser to understand how it might affect your ability to access the government’s age pension.
Similarly, look for additional streams of income to supplement retirement savings that don’t even require leaving home. Some options include setting up a casual consultancy, paid tutoring or mentorship work. How can you take advantage of years of experience in an industry to boost your retirement income?
Where to get extra help
If you need help getting your retirement back on track, seek advice from a financial adviser if possible. If you don’t have an adviser but would like to speak to one, you can call AMP on 131 267 or use our find an adviser search function.
1 The downsizing patterns and preferences of Australians over 55: Australian Housing and Urban Research Institute
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