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8 Steps to Secure your Retirement

Retirement should be like a second childhood ... without parental supervision. I believe that's doable for most people, but it takes planning.

Luckily, you can begin right now by taking these steps:

1: Decide where you want to reside.

Think about the retirement lifestyle you desire and find a location that supports it. If you want to travel, you may opt to downsize to a unit or duplex. If you want peace and quiet, a small town could be the ticket. If you want to have more money at your disposal, you might want to move somewhere with rates and insurance costs and a lower cost of living.

2: Practice now.

After you retire, you no longer have somewhere to go every day. You're cut off from your typical social network. It can be a surprisingly difficult time. Try to avoid post-retirement depression by contemplating what you want to do and beginning it now. Would you like to volunteer? Start now. Interested in teaching for a university? See if you can teach a class now. By practicing your retirement, you can find out what you really want to do (it may not be what you think), and meet new people, too.

3: Get rid of debt.

I believe that when you are retired, so should your debt be retired. If you have no mortgage, no car payment and no credit card debt, most of your expenses will be variable costs you can control. Wouldn't that feel great? Want to begin now? Make a list of all your debts, then rank them by highest interest to lowest. Depending upon the terms and conditions of the loans, it usually makes sense to start paying off the highest interest debt first and work your way down until you have paid off all your debt.

4: Reconsider your risk profile.

Once you're five years away from retirement, I believe you need to adopt a defensive investment philosophy. You may have invested more aggressively while you were growing your money. However, now would be the time to diversify and reduce your risk to help avoid losing a big chunk of your retirement to a bear market. We recommend and often employ several defensive strategies with our Money Matters clients, such as rebalancing their portfolios quarterly; reducing their exposure to equities; and creating stop-loss strategies to mitigate downside risk.

5: Think about your health care.

It's an unfortunate fact of life: Health care becomes more critical (and potentially expensive) as we age. Don't forget to include it in your plans, especially if you want to move or travel extensively. You might consider buying private insurance policy to fill that gap.

6: Budget.

How much money will you need to support the lifestyle you want? I suggest you come up with two numbers. The first is the amount you need to cover the things you need, like food, housing and health care. To get your second number, add the costs of the things you want -- like travel or a club membership. Create a financial plan that gives you a high probability of achieving the necessities, and then add the luxuries if possible.

7: Apply for Centrelink ahead of time.

If you're waiting until your full retirement age to collect Social Security, it's recommended that you apply at least three months before you want your benefits to start (you may apply as early as four months before your full retirement date). Make sure you have all the documentation needed.

8: Review Your Super/Pension

After years of pumping money into their super, approaching retirement have some decisions to make. Transferring money out of super could increase investment options, allow for more flexible estate planning and offer more distribution options. When making any decision about moving your money, make sure to take into consideration your age, current financial status and costs involved. It may not be the right time for you to roll over your super, but it is the right time for you to study your options.

Disclaimer This information is current as at 29/10/18.This article has been prepared by Heart1Stop, a social media brand owned by Heart Mortgage Services and Heart Financial Advisers. The information contained in this article is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The views expressed here are not those of Heart1stop, Heart Mortgage Services, Heart Financial Advisers, shareholders, directors or staff and associated contractors and business associates. This article has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this article, consider its appropriateness, having regard to your objectives, financial situation or needs. Any taxation information contained in this article is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual’s situation may differ, and you should seek independent professional taxation advice on any taxation matters. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of Heart1Stop or Heart Mortgage Services and Heart Financial Advisers that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party of Heart1Stop or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties ("Third Parties") who are not related to Heart1Stop. These links are provided for convenience only and do not represent any endorsement or approval by us.

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