Planning to retire? Think it all through so you can live the dream

Who to reach out to before making the next big decision of your life
An elderly couple sitting at a table to discuss their retirement planning with an expertImages: Getty

Just as a bird cannot fly with one wing, a happy, healthy and purposeful retirement would be impossible without adequate financial and emotional planning. We’ve worked hard and long for the past five to six decades. We must save enough to last us the rest of our lives, but the real question is: How do we do that?

Whatever your situation, one of the first steps to take when considering a financial plan that will cover everything you want to do in retirement is to start talking to an advisor.

Retirement planning can be complex and overwhelming, especially when managing your money, and this is where specialist advisors come in. Financial advisors offer expert advice on such matters as investment, budgeting, insurance and retirement planning.

Tip: There’s no harm in asking around your mates or other soon-to-be retirees if they can recommend an advisor or someone they trust.

What exactly are you looking for?

Before you jump into the market searching for a financial advisor, take a breather to figure out what exactly you need one for. Which part of your retirement finances do you need help with most – taxation, investment, savings, estate planning and/or will beneficiaries? When you’ve identified your requirements, you can start shopping for an advisor.

What are their policies?

When you find a couple of financial advisors who fit your needs, be sure to ask questions to ensure you understand their policies before you engage anyone. This includes such things as customer relations, retainer fees and their way of communicating. Before hiring an advisor, ensure they are approachable and that their communication style will result in a clear understanding with actionable feedback.

What about their fees?

Enquire about their fees and charges – remember this is your money that you’ve worked hard for! You want to hire a reasonable advisor for your budget. Most financial advisors require fees for their services. These may be charged hourly, as a percentage of assets under management (AUM), or as a flat rate. Most importantly, ask about any upfront fees or hidden charges. It is essential to ask about fees beforehand so there are no surprises down the road.

Other questions to consider

Take time to vet your advisors, and pick the best one that fits your needs and budget. Don’t be afraid to ask questions such as:

  • How do I pay for the retirement life I’m planning?
  • Do I currently have enough funds, and can you show me a projection of cashflow over time and when, with my current finances, I will run out of money?
  • What sort of investments or assets should I have to meet my needs?
  • What investment products do you have access to?
  • Are there any new products I should explore?
  • How do you get paid and are there any products you receive a commission or a trailer on?

One of the main benefits of working with a financial advisor is that they can help you develop a comprehensive retirement plan that aligns with your unique goals and objectives. This includes assessing your current financial situation, identifying potential risks and opportunities, and creating a personalised strategy that maximises your retirement income and minimises tax liabilities.

Remember that using a financial advisor is a partnership, as you should have the final say for any investment advice or placement of your assets.

Note: It’s okay to ask about their credentials and experience. Retirement planning is a complex topic, so you want to ensure you’re working with someone who knows what they’re doing, and holds appropriate licences and certifications.

Edited extract from Dare to Retire Free by Kristen Sutherland and Di Murphy (Smart Retirement Publishing, rrp $39.95)

Estate planning

Estate planning is the process of arranging to transfer your assets and properties to your heirs and beneficiaries after your death. It involves creating a plan for how your assets will be managed, distributed and transferred to your loved ones in a tax-efficient manner that aligns with your wishes. It’s essential regardless of the size of your estate, and can help minimise estate taxes, avoid probate and reduce family conflicts. Estate planning typically involves the creation of legal documents such as a will, a trust, powers of attorney and healthcare directives. You may choose to specify items from your estate for gifting to a beloved child, grandchild, caregiver, neighbour, or even a charity. Make sure these wishes are included in your will. And it may be an opportunity to finally let your loved ones know how you wish to leave this world.

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