How to find an adviser
Afew people have recently asked me about the financial planning process and how it works, so here’s an introduction. Discovery meeting. This involves that crucial moment in which both adviser and client gauge whether they are the right fit for each other. In most cases, the first meeting is complimentary. We will explain how we charge for our services and offer you an estimate of the cost. Client commitment meeting. We develop recommendations and explain our strategies to help you achieve your goals and aspirations. Once agreement is formalised, we will start working on your plan – your statement of advice (SOA). Strategy meeting. We will recommend detailed strategies and products. If you accept the adviser’s recommendations, we will help you to implement the plan, which may take up to a few months. Initial progress meeting. This helps you understand where we are up to in implementing your plan and we answer any questions and concerns. Regular progress meetings. Depending on the life stage you are in and the complexity of your financial plan, you may decide to have regular progress meetings annually, half-yearly or more often. Helen Nan, principal adviser and author at Plan for Your Future
There is one question I’m asked all the time. How much money will I need to retire comfortably? There is a rule of income that will dramatically help determine how much you’ll need to remain comfortable. You need at least 70% of your pre-retirement income to maintain your current standard of living as you enter retirement.
For example, if someone has a household income of $250,000 gross, this is roughly $175,000 net. This means they would need about $125,000 in retirement income.
Based on the nest egg of $3 million in super at a 4% return rate, this would generate $125,000 a year for you in retirement. However, many people are well short of the $3 million nest egg (excluding your family home). Therefore, they end up being very underprepared for their retirement and can’t afford the usual standard of living they’re used to.
So if you plan to slow down with work soon, it’s important to accurately break down your figures in order to secure the life you’ve always wanted when you retire. Mike Sikar, founder and principal adviser at Delta Financial Group