Retiring in 2024 – The Challenges!

Written on the 23 January 2024 by Parkside InvestorPlus

Many people have the aspiration of retiring early, but the actual age at which one retires depends on various factors.

Some individuals may choose to retire when they are eligible for the age pension, while others may opt to do so when they can access their Superannuation.

There was a time when retirement age was age 55, however, today, retirement age differs for each person.

Regardless of your chosen age, there are several factors that are likely to influence your decision as to when to retire.

Recently the Association of Superannuation Funds (ASFA), released its projections for what constitutes a ‘comfortable’ retirement, i.e. how much do you need in your super tank to retire comfortably.

Their findings were as follows:

For individuals, $595,000 was required in their super balance.

For couples, $690,000 was required.

However, the Australian Taxation Office (ATO), states that the average Australian male aged between 60 and 64 has $402,838 in super, while women the same age have $318,203.

I recently wrote an article about Retiring Comfortably  - 2024 and beyond.

However, if you are ready to retire now in 2024, what do you need to know?

Retiring in 2024: Navigating Uncharted Economic Waters

Retirement beckons, promising a slower pace and well-deserved leisure.

But as you approach this stage particularly in 2024, economic headwinds can stir anxiety.

Inflation bites, interest rates shift, and global uncertainty looms.

So, how can you navigate these changeless waters and secure a comfortable future?

Inflation: The Costly Conundrum

The spectre of inflation, currently hovering around 5%, eats into your carefully saved nest egg.

It's crucial to adjust your income and expenses accordingly.

Explore cost-saving measures like refinancing your mortgage (assuming current rates offer savings) or downsizing your living space.

Consider increasing income through part-time work, rental income, or carefully chosen investments. Ensure that you access any Government rebates or benefits that are on offer.

Interest Rate Rollercoaster: Friend or Foe?

Rising interest rates may appear daunting, but they can also benefit certain retirees.

If you hold significant cash savings, higher rates on deposit or bond laddering strategies can provide a much-needed income boost.

Conversely, retirees relying on fixed-income investments like annuities may face smaller payouts as rates climb.

You could consider diversifying your portfolio to mitigate risk and consult a financial advisor to tailor a strategy to your unique circumstances.

Global Turbulence: Weathering the Storm

Geopolitical unrest and economic slowdowns can have an effect on your investments.

In this case, and always, diversification remains key.

Allocate your assets across different asset classes like stocks, bonds, and real estate.

Consider geographically diverse holdings to lessen the impact of any single region's turmoil.

Remember, a long-term perspective helps ride out market fluctuations.

Beyond Numbers: Embracing Change

While managing finances is crucial, remember that retirement is more than just numbers.

Embrace the changeless and redefine your purpose.

Pursue passions, connect with loved ones, and contribute to your community.

A fulfilling life, enriched by meaningful experiences, can outweigh temporary economic uncertainties.

Staying informed is crucial.

Resources like the Australian Bureau of Statistics, the Reserve Bank of Australia, and the Australian Securities and Investments Commission offer valuable insights and data.

And remember, a qualified financial advisor can provide personalised guidance tailored to your specific situation.

With careful planning, flexibility, and a dash of optimism, you can navigate the economic turbulence of 2024 and chart a course to a fulfilling and secure retirement.

Let the wind of change guide you to new, enriching horizons.

If you’re ready for retirement and not sure of your options or if you are a retiree and wanting more positive outcomes in your retirement phase, contact us at Parkside InvestorPlus at (02) 9899 4899.