Pre-Retirement Planning: Key Steps to Secure Your Financial Future

December 6, 2023 December 14th, 2023
Pre-Retirement Planning Key Steps to Secure Your Financial Future

Retirement planning is a journey, not a destination. As you navigate the path towards retirement, it is essential to think strategically about where you are now and where you want to be in the next 10, 15, or 20 years. At MBC Wealth, we focus on three critical aspects for pre-retirement planning:

  • assessing your current financial status
  • defining retirement goals and timelines, 
  • developing an effective investment strategy. 

Understanding these points is crucial for your future financial security and happiness.

Assessing Your Current Financial Status

Know Your Worth

Your journey starts with understanding your financial baseline. Assessing your current financial status means taking a comprehensive inventory of your assets and liabilities. This clear picture of your net worth is the foundation for building a robust retirement plan.

Income and Expenses Analysis

Analysing your income streams and expenses gives you a realistic view of your financial health. Are your income sources stable? How will they change as you approach retirement? Equally important is understanding your spending patterns and anticipating future expenses.  Living expenses can potentially increase in retirement due to things like travelling or going overseas.  This foresight helps create a budget supporting your retirement goals while ensuring you have enough for unforeseen needs.

The Safety Net

An often overlooked aspect of pre-retirement planning is having an emergency fund. Life is unpredictable, and having a financial cushion is vital to avoid derailing your retirement plans due to unexpected expenses.

Defining Retirement Goals and Timeline

Imagining Retirement

What does your ideal retirement look like? This vision is deeply personal and varies significantly from one individual to another. It could be a tranquil life in the countryside, an adventurous life of travel, or a commitment to community service.  You may also have your eye on securing your family’s legacy or being able to help your children dive into the housing market. Your retirement goals will dictate the financial resources you’ll need.

When to Retire?

Deciding your retirement age is a pivotal part of the planning process.  A key component is confidence that you are in a strong enough financial position to retire and meet your income needs.  Early retirement has its allure but requires more aggressive savings and investment strategies.  Knowing your desired retirement age helps create a timeline for your savings goals.

Lifestyle Matters

Your expected lifestyle in retirement significantly influences your financial planning. A luxurious retirement, multiple overseas trips, or an impressive camper trailer to take you around Australia’s big loop require a more significant nest egg than a more modest lifestyle. Also, make sure you factor in healthcare costs. We might wish to avoid this conversation, but if you are currently part of the squeezed generation with ageing parents and teenage/adult children, you will already know about the significant impact and costs of poorly planned aged care.

Developing an Investment Strategy

Assessing Risk

Your investment strategy should align with your risk tolerance, which changes with age and life circumstances. Younger individuals might be more inclined towards riskier investments for higher returns, while those closer to retirement generally prefer more conservative approaches.

The Right Mix

Asset allocation is critical to pre-retirement planning, particularly as you approach key milestones like turning 50. A well-balanced portfolio, diversified across various asset classes such as cash, shares, bonds, and real estate, is essential for mitigating risk while targeting growth. Diversification helps balance your investment risks and positions you to capitalise on different economic conditions.


After the family home, superannuation is generally most people’s largest asset. Yet many people don’t pay attention to their super until just before they retire.    Super can provide a tax-effective source of income in retirement and can help supplement benefits such as the Age Pension (if eligible).  

It is important to be engaged with your super and understand what you are invested in.  While some people are happy letting someone else manage their super, others like to have more control and influence.  For these people, Self-Managed Super Funds (SMSF) can be an option.

SMSF is a superannuation fund that you manage yourself, providing more control over your retirement savings than traditional super funds. SMSFs can be a powerful tool for those looking for more direct retirement planning involvement. They allow for a broader range of investment options, including property, which might not be available in standard superannuation funds.

For individuals nearing 50, considering an SMSF could be especially advantageous. This is because, at this age, you might have accumulated significant superannuation savings and have the experience to make more informed investment decisions. However, SMSFs also come with added responsibilities and require a commitment to ongoing management, compliance, and investment strategy oversight.

At MBC Wealth, we understand the intricacies of SMSFs and how they can fit into your overall retirement plan. In our upcoming article, we go into more detail about SMSFs, and explore the benefits, responsibilities, and suitability for different stages of your financial journey. This will provide a comprehensive view of how SMSFs can complement your retirement plans, helping you make informed decisions for your future.

Stay on Course

Your investment strategy isn’t set in stone. Regular reviews are essential to ensure they align with changing goals, market conditions, and your circumstances. As you move closer to retirement, your focus might shift from wealth accumulation to wealth preservation.

Thinking about where you are now and where you want to be in the future is a critical component of pre-retirement planning. It’s a blend of introspection, realistic assessment, and strategic action. By focusing on critical aspects, you’re not just planning for a secure financial future; you’re paving the way for a retirement that’s as rewarding as it is secure. Remember, the best time to start planning is now, and the best plan evolves with you. 

MBC Wealth are experts in retirement planning.  If you are ready to start this conversation, contact Greg Thornton at MBC Wealth. With over 17 years of experience in this space, he can help guide your thinking and ensure your pre-retirement plans consider everything you wish for your future retirement.