If you are retiring soon, chances are you are quite apprehensive about this stage of your life. From our experience, some common concerns are;

• Income - will you be able to generate an income that will last for the rest of your life?
• Unforeseen Circumstances - what happens if we experience a large unexpected expense?
• Lifestyle, will you be able to do all the things you had planned - and generate a regular income?
• Inflation - will your income keep pace with inflation?
• Government Support - do you qualify and who will take care of all the Centrelink/DVA side of things?
• Estate Planning - on your death, will your assets go to your chosen beneficiaries?
• Part Time Work - am I able to work part time, and still generate the income I need?

These are just some of the issues which face many people who are about to retire. Your situation may be different however, the chances are you are likely to need advice from a professional.

How much Super is enough?

Working out how much money you will need in retirement depends on your personal situation. Not only does the amount of money you need depend on your lifestyle choices, but you may have some other income options in retirement (such as part time work or payments from other investments) which will supplement your super.

But you need to think about how much you’ll need early enough to do something about it.

The Association of Superannuation Funds of Australia believes a single person needs an annual income of $35,668* and a couple needs $47,766* to live comfortably in retirement. To achieve this, depending on when you intend to retire, you would need to have in your super fund:

^ Source: Colonial First State.

Assumptions: earning 7% pa after fees and taxes with inflation at 2.5% and paid via an indexed income stream. A change to any of the assumptions and variables can produce significantly different results.

* Source: Association of Superannuation Funds of Australia Westpac ASFA Retirement Living Standard, ‘How much do you need to spend to have a comfortable standard of living in retirement’ March 2007.

Now you may be thinking you can rely on the Government Aged Pension, but it’s only about $22,802 (effective 1 July 2007) per year in total for a couple. So the chances are you’ll need more money to fund the lifestyle you want.

To give you an indication of the amount you will need in retirement, we have provided a number of helpful calculators here.

Don't forget your Estate Planning?

The main reason you need to plan your estate is to make sure your money and assets are inherited by the people you want to receive them. Another important reason is to make sure they attract as little tax as possible.

Your Will is also important, so you need to make sure it is up-to-date, and correctly reflects your wishes. Even if you don't have many assets, having a Will can save your beneficiaries, family and friends a lot of trouble and heartache. Otherwise it could take months to sort out your affairs.

Things to consider when drawing up your will include;

1. How to put your will together - the safest way is through a reputable solicitor. There are cheaper alternatives, such as Will kits, but you need to ensure that your wishes are properly recorded and that your Will is made and witnessed properly.
2. Choose an executor - and ask them beforehand if they are happy to do it.
3. Put together an information sheet - listing all your investments and valuable assets. This can make your Will much easier to administer.
4. Include clear instructions - for how you wish the assets and/or property to be administrated.
5. Funeral arrangements - organising funerals can be traumatic, so the more instructions you leave the easier it should be for your family.
6. Decide if you want to leave your body to science - or donate your organs.
7. Keep your Will in a safe place - but where it can be easily found if needed.

Some things to consider outside your will;

• Superannuation - You should consider completing a binding death nomination to the trustee of your superannuation fund.
• Superannuation Income Streams - you should consider completing a pensioner beneficiary nomination.
• Small business or partnership - this may be subject to a buy/sell arrangement with the other partners. In these circumstances your share of the business would automatically pass to the remaining partners (usually in exchange for the proceeds of an insurance policy).
• Power of Attorney - This is a legal document that appoints another person to make legal and/or medical decisions on your behalf. It is particularly useful should something happen where you are temporarily unable to sign documents, such as a bad accident.
• Do you need a Testamentary Trust? -This is a trust created in a person's will, which is activated upon the death of that person. Instead of assets passing directly from one person to another, the assets are passed to the Testamentary Trust and then administered by the designated trustee - usually a family member, a trustee company, accountant or a solicitor. After considering your personal situation, you may wish to consult your legal representative to discuss this further.

Estate planning can be complex and it's a good idea to seek the professional advice and assistance of both a financial planner (who understands the intricacies of superannuation) and a qualified legal practitioner (who understands the legal aspects) to make sure all your bases are covered. The team at 50Plus work in conjunction with either your estate planning specialist or alternatively, we can coordinate the whole process through our preferred estate planning specialist.