Retirement Gap Assessment

Are you planning for your retirement? If not, you should be - even if its still a long time away.

Time seems to just get away on us. Don't put your retirement planning off until it's too late to make a difference.

Some of the things you need to think about are:

  • How long will your savings last when you retire?
  • How much do you need to have saved to live the retirement lifestyle you want?
  • Are you on track?
  • What can you do to bridge the gap in your retirement plans?

When you ask yourself these questions, are you happy with the answers?

If you are, that's great – you're well ahead of most people.

If you're not, or if you're unsure, we'd like to help!

No-one knows the future with certainty, but there are things you can do to improve your chance of a comfortable retirement.

We've developed a four-step process to help you on the way to realising your retirement dreams.

Step 1 – Know your numbers
Step 2 – Get professional advice
Step 3 – Develop a plan and implement it.
Step 4 – Regularly review and adjust if needed.

As you go through each step, write down the results (or better yet, save to pdf) as they'll help us during our meeting.

Step 1 - Know your Numbers

This is the part of the process you'll do by yourself, using the following guidance and tools we have provided for you.

1.1 How old are you now, and at what age do you want to retire? How many years do you think you'll be in retirement?

No idea? Check out the Survivorship Calculator.

This calculator uses averages to estimate your life expectancy and provides the statistical probability data for a range of possible retirement periods. Of course, the statistics are based on averages using certain assumptions about health, lifestyle etc. You may need to make allowances for your own personal circumstances and family longevity history.

1.2 You'll need to think about what you would like to do when you retire. Where will you live? Will you have hobbies? Do you plan to travel?

Now work out how much it would cost you a year to have that lifestyle now. Think about what you spend now, and how that will change in retirement.

Do a budget! We've got a really useful Budget Calculator that could help.

If you need help working out your net (after tax) income, use this calculator.

Firstly do the budget based on your current income and expenses. Save a pdf file "Current Budget" to discuss during our meeting.

Then, change the expense numbers in the budget calculator to those you expect to incur when you've retired. Some of the expenses won't change, but others will. Delete the income figures, we know they have to be at least as much as the total expenses. Save the result as a pdf file "Retirement Budget".

1.3 Work out what your current superannuation and investment assets are worth, after deducting any associated debt?

Don't count the value of other lifestyle assets such as cars, boats, caravans etc.

Don't include your own home (unless you truly plan to unlock cash for retirement by downsizing the value of your home - and then only count the amount of cash you expect to free-up under this strategy).

1.4 Work out how much capital you need to retire on.

There's a bit of a rule of thumb that says you need to enter retirement with capital at least 20 times your planned annual expenses, but this could vary depending on the age you retire (if you retire earlier than normal you'll need more) and the returns you'll achieve on your investments (if you're risk adverse and don't have much exposure to shares or property you'll also need more).

Use our Target Assets Calculator to work out how much capital you'll need to retire on under varying assumptions for length of retirement, investment returns, and annual income requirement.

Pick the set of assumptions you think is reasonable and calculate your Target Assets at retirement.

1.5 Work out your Retirement Gap.

Deduct the number you worked out at Step 1.3 from the Target Assets number calculated at Step 1.4. This is your Retirement Gap, or the amount you will need to save (in addition to paying off any personal loans or loans against your home).

1.6 Decide if you need help.

If it's a negative or small positive number, you're well on track for a comfortable retirement - Happy days!!

But could you be doing more to maybe give you a better retirement lifestyle than you thought you would have to accept, have you got the capacity to do more to help your family, or would you like to leave a legacy?

Are you likely to bridge this gap at your current rate of saving and super contributions? Will you be forced to scale back your retirement plans? What else could you be doing to bridge the gap?

Step 2 - Get Professional Advice

This is where we could help get you back on track.

The first step is to take advantage of our complimentary initial meeting, where we review your numbers and identify possible strategies. This is a high-level overview of strategies and opportunities only and does not commit either of us to an ongoing relationship.

To help us provide this service for you, we need you to tell us a little bit about yourself. Please complete the following two questionnaires, which will be securely transferred to us electronically.

5 Minute Financial Health Check
About You Questionnaire

The first one is a short survey where you get to tell us how you feel about various aspects of your financial position. It will only take a few minutes and gives us some great insight into areas that may be troubling you and where we may be able to add value for you.

The second one will take a bit longer - maybe 20 to 25 minutes and provides more detailed information about your financial position - investments, loans, super and insurances.

To book your complimentary meeting, please:

  • Complete the 5 Minute Financial Health Check and About You Questionnaires
  • Send us an email with the subject line Retirement Gap Assessment and attach a copy of the Current Budget and the Retirement Budget documents you saved earlier in Step 1.2 for us.
  • Note in the email your preferred method of contact, and a good time to call if by phone.
One of our team will call you to arrange your complimentary meeting with Stuart.

You will need to allow at least 30 minutes for the meeting, and then an extra 30 minutes each for the Mortgage Health Check and the Property Purchase Ready assessment if you're thinking about buying a home to live in or for investment and just want to check your numbers.

We're happy to spend the extra time to help you, but please just let us know which of the health checks you want to cover at the meeting so we can reserve enough time for you.

If you would like us to look at your ability to buy a property, or would like us to review your current mortgages, please also attach a copy of the following documents to your email requesting the meeting:
  • Latest loan statements for each loan
  • The loan contract / offer document
  • Council rates notice for each property
  • Last 2 payslips for yourself and partner (if relevant)
  • Your latest superannuation statements
By following this process we can make sure all the information we need is gathered up front and can be reviewed before the meeting, which saves us both time and makes the meeting far more productive.

Step 3 – Develop a plan and implement it

You'll get to decide whether you need our help with this stage or not. There's no obligation on either you or us to proceed past Step 2.

If you decide to work with us, we will agree on the scope of the engagement and a fixed fee for service before any work is commenced.

Remember - a plan is worthless unless it is implemented - otherwise it's just a lost opportunity.

Step 4 – Review and amend as necessary.

Even with the best laid plans, things can get off track.

Whether you're working with us or not, you need to review your plans regularly and take corrective action from time to time to stay on track for your dream retirement.

As the well-known saying goes - failing to plan is planning to fail.

Take the first step in securing your retirement future.