Retirement Income – What you NEED and what you WANT!

When discussing ongoing income needs in retirement with clients, we look at two very different and very important areas – NEEDS and WANTS.

Needs – This is the income that you spend on a day-to-day basis.  It is used for buying the groceries, paying the phone and electricity bill, a dinner out and a trip to the movies on the weekend… just the normal, everyday living expenses that you require to live a certain lifestyle.

Wants – These are the ‘special objectives’. You may have heard me call it your ‘Fun Fund’. This income covers your travel aspirations, your renovations, your gifting objectives and any expenses that you will incur outside of the normal day-to-day parameters.

Moving closer to retirement, it is important that you start considering your NEEDS and WANTS in relation to your income objectives.

A great place to start is with a cash flow budget – I know…it’s a bit boring!  But it’s essential that you understand ‘how’ you spend your money to understand what your future lifestyle, based on today’s situation, looks like once you finish work.

“Contact your adviser or our office on 3371 0866 to access our client-specific, online Budget Questionnaire”

Once you have a better understanding of your expenses – the NEEDS – you can start to define your WANTS.

For example – if travel is an important objective to you, start considering where and how you want to travel.  Do your plans involve overseas trips each year, with lots of activities?  If so, you will need to allow for a larger sum of funds to cover this expense.  If staying in Australia, seeing the sights and generally taking it easy is more your style, then a smaller amount of funds will most likely be required.

You may wish to allow for a new car, a new caravan or look at some major renovations on your home.  These are all areas you will need to consider when defining your WANTS.

Either way, it all comes back to being clear on your objectives (what is it you really want to do when you stop working?) and understanding your cash flow requirements (what does it cost me to live my life the way I want to on a day-to-day basis?).

Our retirement planning specialist advisers can help you to understand your options, articulate your goals and objectives and work towards funding your best life once you finish work.

For a clearer picture of what retirement holds for you, contact us at Collective Wealth Advisers.  We tackle today, and tomorrow, together! 

  • Aaron Steer
  • Jul 08 2022
  • General
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