Planning for retirement can feel overwhelming, but breaking it into manageable steps makes it much more achievable. This guide will help you assess where you are now, where you want to be, and the actions you need to take to secure your financial future.
Rise High Investor Weekly Video #55 – What will your retirement look like
Step 1: Assess Your Current Financial Position
Start by taking an honest look at your finances. Focus on your net assets, specifically income-producing ones like investment properties, shares, or other assets generating passive income. Exclude non-income-generating items like your home or car, as they don’t contribute to retirement income.
Step 2: Project Your Net Assets at Retirement
Next, consider your ideal retirement age and estimate what your net assets will look like by then. Use tools to help:
- Superannuation: A superannuation calculator can estimate your balance at retirement.
- Investment Properties: A property worksheet can help project the future value of your properties.
- Debt Considerations: Factor in how personal expenses and repayments will evolve over time.
Step 3: Determine Your Annual Passive Income
Once you’ve estimated your net assets, calculate your projected annual passive income. A simple rule of thumb is to multiply your net assets by 4%. For example, if your net assets total $1 million, your passive income would be $40,000 per year.
Reflect on whether this figure aligns with your desired retirement lifestyle. If it does, stay the course. If not, you’ll need to take steps to grow your wealth.
Your retirement lifestyle depends on the actions you take today. Don’t rely solely on government pensions—start growing your income-producing assets now. Whether it’s through investment properties, shares, or other strategies, make intentional decisions to shape your financial future. With the right planning, the retirement you’ve dreamed of is well within your reach.