Planning your retirement is like buying a car – work out what you want first.

“How much do I need in retirement?” is probably the most commonly asked question for those aged 50+. You may even have asked this question of your own financial advisor – maybe more than once. But it’s a bit like walking into a car yard and saying “how much do I need to buy a car?”

The car salesperson will stare at you blankly and start firing off a series of questions –

  • what model do you want?
  • European, Japanese, American, Korean, or Australian?
  • Four six or eight cylinders?
  • Turbo charged?
  • Manual or automatic?
  • Sedan, convertible, station wagon, SUV, four wheel drive, utility?
  • Metallic paint?
  • Satnav?
  • Sunroof?

There’s a big difference in price between a Hyundai and a Ferrari. So you need to give the salesperson some guidance. That involves doing some planning around what you want –

  • doing some research about what’s available
    thinking about what features you need or want
    dreaming about what you would really love to drive
    And then working out what you can afford.
    It’s no different when you go to see your wealth advisor, to answer the question “how much do I need in retirement?” They need some guidance on what you want to do with your life before they can provide any advice on how much you will need to fund it.

So you need to do some planning around what you want to do in retirement, before a financial planner can help you work out how much you will need. Take holidays for instance – three months on the Queen Mary will cost more than a week at Coolangatta.

It is likely that you will enjoy 20 or 30 years of good health in your retirement, and so it is important to take some time to plan this phase of your life. It took a lot of time, determination and focus to build your career; have you thought about applying the same effort to plan your future after you retire?

Here are some of the things you need to think about and plan before you can get meaningful advice on how much you will need in retirement –

  • Your residence –
  • where will you live?
  • will you downsize?
  • Do you need to renovate your existing residents to be more suitable?
  • Will this cost money or will you free up capital for investment?
  • What holidays do you want to take each year?
  • How much is that likely to cost?
  • Do you intend to do some part-time work?
  • If so, what are you likely to earn from that?
  • Would you do some volunteer work?
  • Is that likely to cost money?
  • What do you intend to do to stay socially connected?
  • What will you do to stay physically and mentally active?
  • What has your career prevented you from doing?
  • Do you have unfulfilled dreams or plans?
  • How much will these activities cost each year?

Like any planning, it is important to start well in advance of the event – in this case, well in advance of retirement. Proper planning can involve the following steps –

  • thinking about what really matters to you – do you have a purpose you would like to fulfil?
  • taking the time to consider your options
  • accessing resources to help you plan activities in various aspects of your life after full-time work
  • opening up to possibilities of things you haven’t even thought about
  • brainstorming with like-minded people, and
  • preparing your customised personal plan for your life after full-time work.

Transition Planning Australia believes that everyone is entitled to a meaningful life after full-time work. To find out how we can help you plan your life and answer the questions outlined above, contact us via the enquiry page on our website or send an email to

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