This document discusses key considerations and questions around retirement planning such as lifestyle choices, costs of retirement, investments, housing, government benefits, estate planning, health issues, and managing finances in retirement. It provides advice such as keeping investments simple, establishing a budget, drawing a regular income from superannuation or an allocated pension, using a diversified asset mix, and seeking professional advice for major financial decisions.

1. GENC3003Personal Financial PlanningAndrew Hingstonandrew.hingston@unsw.edu.auUnit 18: Retirement

2. DiscussionWhat kind of lifestyle do you think that your parents like to experience in retirement?Where would they live?What would they do?Where would they travel?Would they live the ‘high life’ or be ‘frugal’2

3. 3Retirement decisionsWhat will I do in retirement?How much will it cost?Do I have enough money to fund my planned lifestyle?Will I outlive my investments?How will I stay mentally active?Should I keep my money in superannuation or withdraw it?How much shall I plan to leave for my children when I die?Where should I invest my retirement savings?Should I get professional advice? From whom?

4. 4Where will I live? Should I move to a unit near the beach and sell the family home?How much time will I spend with my children and grandchildren? How much time will I spend travelling?Should I apply for the age pension?Do I need to adjust my will?What plans should I put in place if I become mentally ill and cannot handle my investments?How can I provide for my spouse if they survive me?

5. 5Retirement FAQShould I withdraw all my money from superannuation?NO!!! Usually it is better to roll it into an Allocated Pension and draw a regular monthly income stream to avoid lump-sum tax!Should I sell the house?Could be a good idea to down-size to a unit and then place extra money into super.How does the family feel about this?How much should I leave the kids?Our generation should be okay so better to spend most of the money!We will probably be about 60 when our parents die so we won’t need the money then anyway!

6. 6How should I manage my money?Keep things simpleEstablish a budget and stick to itSet up your investments/super to pay a regular income stream to pay for your expensesHow should I invest a large amount?Keep it inside super (or get it into super before retiring)Invest into an inexpensive administration system that gives you access to managed funds.Draw a regular income stream.Keep the investment portfolio simple and leave it there!

7. 7What asset mix should I use?Seek advice on this. Something like:Cash 10% (to pay most of this year’s income)Fixed interest 20% (to some of next 5 year’s income)Property 10% (growth and income)Aust shares 40% (growth for future income 5+ years)Int shares 20% (growth for future income 10+ years)Why not put all my money in the bank?Interest is all taxable (bad tax decision!!)No growth for the future