Superannuation and retirement
When and how you retire is a very important and personal decision. Planning for that day however, should not be neglected and it is important to understand what your retirement goals are well before you retire. By planning early, you can ensure your retirement years live up to your expectations and is not plagued with financial concerns.
As a general rule of thumb, you should aim to retire on about 60% of your current pre-tax income. i.e. if you're currently earning $60,000 p.a. you should plan to receive an income of about $36,000 p.a. This income can be derived from various sources.
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When you are drawing an income from investments during retirement, diversification becomes a very important factor. By ensuring that you are appropriately spreading your assets between secure investments such as cash and fixed interest and growth assets such as shares and property, you are ensuring that the value of your investment is not dependant on the outcomes of a single asset class. Rather, you spread your money across different investments to reduce risk.