5 Things To Not Forget When Planning Your Retirement

Planning for your retirement might seem like an overwhelming task, and even a pointless one if you’re thinking 20-30 years down the track, but it could be the biggest and most important plan you’ve ever made.

While retirement is an exciting time and something you may have been looking forward to your whole life, you may not be as comfortable as you think if you haven’t made a solid plan.

Here are some items to add to your retirement checklist that you may not have thought about so you can adjust and be prepared on how your finances might change over the years to come.

1: Not allowing for markets to shift

It’s easy enough to think that a retirement plan is about calculating your wealth portfolio and what your superannuation balance will be and working out what gap there will be to retire on. But you’ll need to also account for fluctuations in the market and that an average rate of return is not enough to compensate for large downturns in the economy over a 20-30-year period.

2: Not accounting for taxes

Just because you’re retired doesn’t mean you become tax-free all of a sudden. Super is designed as a tax-effective means of accumulating wealth for retirement. However, you’ll need to consider whether you’re taking your benefits as a lump sum or not and whether your fund is a taxable fund or an untaxed fund.

3: What is taxable and what is tax-free

Part of your super money is taxable, made up of:

  • employer contributions
  • salary sacrificed contributions
  • personal contributions claimed as tax deductions

Part is tax-free, made up of:

  • after-tax contributions
  • government co-contributions

4: Assuming the costs will be the same

Most people calculate the rise of inflation and adjust for everyday expenses going up such as petrol, milk and bread but often forget that now they don’t work they may have more expenses. While historically inflation is calculated by the consumer price index of 2 per cent, other areas like medical expenses can have inflation rates in the range of 5 per cent. Without working you can enjoy all the freedoms of more travel and a more active lifestyle with more time on your side, but these things cost more in 20 years-time too.

Using a balanced approach to your spending assumptions can lead to pitfalls in your retirement plans.

5: Not planning for longevity properly

The population of many of the wealthiest countries in the world have life expectancies of over 80 years. In 2019 the life expectancy in Spain, Switzerland, Italy, and Australia was over 83 years. We benefit from advances in medical sciences and are living longer than ever before. Many people don’t plan according to longevity and how this will affect surviving a spouse and incorporating inflation rises and taxes.

At Charter Partners, we can help you strategically plan for your future vision, including your retirement plans. We can lead you through a process that enables you to define your future vision while focusing on your present situation. Ask us how by contacting us today!


Anthony McPhee

Anthony McPhee, Principal

B.Bus (Accy) QUT | FCPA, SSA (SMSF Specialist Advisor with the SMSF Association) & Registered Tax Agent

Anthony has over 25 years accountancy, taxation and superannuation (SMSF) experience. He eagerly welcomes a challenge and his passion is in small business accounting, superannuation, consulting and taxation advice. He provides real business benefits for each of his clients and is well regarded for his succinct and accurate accounting skills. Anthony is also a self-managed superannuation fund (SMSF) specialist with Australia’s leading SMSF body, The SMSF Association.

Learn more about Anthony.

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