I’m often asked this question when discussing retirement and estate planning with a client, and it’s a difficult question to answer.
We’re all different. We have different needs and wants, different aspirations and things we want to do and achieve in life.
Thats why I often turn the question right on its head and ask a question of my own.
The Association of Superannuation Funds (ASFA) suggests that an average couple living a comfortable lifestyle will require approximately $65,445 per year, while an average couple living a modest lifestyle will require $42,621 per year.
I haven’t provided any figures of my own here because I believe that if you genuinely enjoy what you do, perhaps your solution is to seek financial freedom instead, that way, you don’t have to work as much as you do right now.
I’ve heard of people who work for 32 weeks a year and take off 20 weeks a year, because they’re doing exactly what they love and don’t want to give that up.
They don’t necessarily want to retire, they just want to have financial freedom to do what they love.
I’ve also heard of people who are ‘unretired’. They have retired from their day jobs and started their own businesses, or they freelance and travel, finding different streams of income while doing what they enjoy.
So, I pose another question.
Some argue that the key to happiness in retirement is having purpose.
An article I read recently on Psychology Today suggests that those with a sense of purpose have better physical and mental health, and have stronger relationships, particularly after the age of 50.
I haven’t answered the original question on how much you will need when you retire or when you seek financial freedom, and that’s because it’s up to you to determine what sort of lifestyle you want.
When it comes to retirement, it’s important to understand what you want to do and why, and how much those things are going to cost.
Below are some examples of things to think about when working out how much you might need in your retirement:
In last week’s blog post, I spoke about the fact that people often go to their legal professionals to seek answers on what they should do before working out what they want.
While seeking advice is a good step to take, it’s important to think about what you want first.
Below are some questions I encourage you to ask yourself to work out how much you might need for your retirement.
Firstly, do you really wish to retire if you love what you’re doing?
Secondly, when it comes to working out how much you need, if you do decide to retire or if you just want financial freedom, really think about what you want to do in that time and how much that will cost per year.
Your retirement is as unique as you are.
Doing this is the only real way to start working out what your retirement will cost.
Personally, I don’t think I’ll retire. That’s because I love what I do and I want to keep doing it for as long as I can.
If you’ve been thinking about your estate plan or retirement, you can book a 15 minute appointment here with me to discuss.