Retiring comfortably made simple

There is a lot to be gained from lowering the background noise and sticking to your long-term goals.  

Confidence can have a positive impact on most aspects of our life. With confidence, everything seems more achievable and your investment goals are no different.

The years since the GFC have made it difficult for some people to invest with confidence, although that does not mean it is no longer possible. Confidence is all about having a positive attitude, and most importantly, being well prepared.

The following are core principals required in order to be a confident investor with clear direction:

Have a plan (set clear goals)

Any project or goal that is either complex or has a magnitude of variables requires forethought and planning in order to achieve a desired outcome. For instance when planning a holiday, most people will have a general process they like to follow, some have refined over many years, some have learnt from previous mistakes, others seek advice while others rush around and book arrangements at the last minute.

When we consider retirement the potential variables increase significantly, although the alternative of not planning could mean a lifestyle well below what someone had become accustomed to or expected once they retired. A stage of life that may have been thought of as freedom may become a period of worrying whether you have enough to do the things you would like. The earlier you set your financial goals the greater the likelihood of achieving them. 

Remain calm


For example, the Australian shares ASX/200 index dropped by 40.4% in 2008, but the following year they gained 39.6%. If you sell in a downturn and eventually buy your investments back, you may be paying more for those assets than you sold them for.

Having a sound investment strategy that you have put in place with your financial planner means you’re focussed on the end goal, not the fluctuations along the way. This can help you stay calm and confident when others are panicking.

Understand investment cycles



It can be difficult to see the upside when there’s a lot of ‘doom and gloom’ in the media.  However, investment markets have survived the Great Depression and two World Wars and this resilience should give you confidence to persevere with your long-term plans. 

Think long term


Take an average couple aged 50 and  45. He can reasonably expect to live to 86, and at that time her life expectancy will still be six years. This means that at age 50, this couple are likely to be investing for the next 42 years!


Cover all your bases

The ideal way to ride out the lows and capitalise on the highs of the investment markets is to develop a comprehensive financial plan that covers your investments, superannuation and insurance.



Spread your risk


The key is choosing a mix of investments that suits where you are in your life, your attitude to risk and your goals, and then sticking with these investments through the market highs and lows or until your objectives change.


Stay up to date

Once you have a financial plan in place and you have set a direction, from here it is paramount that your progress is monitored to ensure that you remain on track. New rules and regulations come along regularly – particularly in superannuation. New investment opportunities will always emerge. The best way to ensure you’re making the most of these opportunities is to review your financial plan regularly with your financial planner. With their ongoing support and advice, you can be confident in all market conditions that you are working towards the lifestyle of your choosing in retirement.

This post by Alex Apostolopoulos first appeared on the PKF site and is republished here with full permission