If you have existing debt, you are not alone. Many Australians find themselves living from one pay cheque to the next, regularly making payments on balances owing and spending more than they bring in annually. While that might not be a massive problem during your working years, it can quickly become a burden in retirement when you no longer earn the same income.

Gaining Control of Cash Flow Now

It is important to take control before retiring from the working world, rather than waiting until that time comes. Otherwise, you might face consequences that could otherwise be avoided or significantly lessened.

For example, you risk heading into retirement with high-interest loans that you cannot pay off each month because of a lower income. The interest can quickly compound over time, putting you under a great deal of stress, not to mention taking away money from trips and other fun activities in your golden years.

It also can be difficult to change spending habits. Leaving this adjustment until you retire can take away from the relaxing time you might otherwise have during this later stage in life.

Know What You are Getting into Beforehand

Prior to borrowing any more money, know what this will entail moving forward. You will have to pay back that sum plus interest in the future.

Thus, never take on more than you know you will be able to pay off in a relatively short period, generally. Personal debt can quickly become problematic, especially when your income in retirement comes from savings.

While you were able to pay off credit card balances and make mortgage payments while working, now you are not doing that and need to stay on top of bills. The last thing that you want is to feel like you cannot afford to live longer.

What is a Comfortable Lifestyle for You?

Balancing your cash flow now puts you in a position to avoid or minimize the adverse effects described above. This does not mean that you must feel like you are going without or have no spending money. Instead, you will be able to live comfortably while not spending beyond your means.

Precisely what “comfortable” means to you will not necessarily be the same for someone else. We are happy to help you create a budget now and another one for when you enter retirement.

Knowing what your spending and saving amounts ought to be in those beginning years of retirement will help to dictate what your budget looks like now. It involves maximizing savings and reducing spending, all while still being able to live comfortably.

Income Streams in Retirement

Also, take the time to learn about the various income options available in retirement. For example, you might put your super savings toward an annuity that pays you regularly. You can either get payments for a specific time or guaranteed payments through to the end of your final years.

While the financial options can seem overwhelming at first, as can creating a budget, it does not have to stay that way. Our clients tell us that we are helpful, friendly, and explain concepts in a way that is easy to understand.

Learn more about how to scale back spending before retiring from your job and how to increase savings by contacting us today.

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The information contained within this site has been provided as general information only and prepared without taking into account your financial position, objectives, and needs. You should consider its appropriateness and seek financial advice before making any financial decisions.