Retirement
Work backwards and buffer: How to set (and stick to) financial goals
Retirement
Work backwards and buffer: How to set (and stick to) financial goals
Working backwards is one of the most effective ways for individuals to set financial goals that actually work, according to a finance director.
Work backwards and buffer: How to set (and stick to) financial goals
Working backwards is one of the most effective ways for individuals to set financial goals that actually work, according to a finance director.
On a recent episode of The nestegg Podcast, Reventon’s Billie Christofi said that especially when planning for retirement, “we’ve got to be realistic about how much money we’re going to need”.
“If we choose to retire, we need financial freedom. What does that look like?”
Reinforcing the importance of goal-setting for planning purposes, Ms Christofi said that when setting such goals and expectations “it’s important to really work backwards. To really look at where you see yourself [in retirement].”
Acknowledging that it “sounds like a really faraway goal”, especially for young people, the finance director explained that using the technique “helps you really set up a good structure with time frames of how you are going to achieve those investments”.
“You’ll know if you’re keeping on track or if you’re falling behind,” she stated.
She said it’s especially important to consider as the life expectancy of Australians continues to increase.
But how can we plan so far ahead, when we don’t actually know what our lifespan could look like?
According to Ms Christofi, this is where the importance of a “good buffer” comes into play.
“The banks do that with their monitoring – when they’re assessing you, they’re going to put a buffer in place, just to account for increases in interest rates of if your financial situation changes.”
“We need to really do that for ourselves as well,” she explained.
It’s “making sure you’re prepared and ready” for whatever life expectations you have, whether that be family holidays or having a child.
Ms Christofi believes “it’s really important that we are prepared because everyone’s life experience is different and different life phases have different expenses”.
“We need to always be prepared for that – as long as you do have that, and you’re always putting savings as a priority, then you’ve got that buffer in place.”
From her perspective, many Australians get into the habit of spending, then saving what’s left.
“If you actually put savings first and then spend what’s left, you’ll always put yourself first,” she offered.
About the author
About the author
Retirement Planning
What you need to know to get ahead financially
Australians looking to get ahead are being advised to analyse their financial situation, set financial goals and reduce debt whenever possible. ...Read more
Retirement Planning
How to adjust your wealth strategy during COVID
Investors are being urged to be conservative about spending, reduce debt and be careful of assets that are supported by government spending, as they look to adjust their wealth strategies during the f...Read more
Retirement Planning
Should older Australians downsize their property?
Older Australians face the dilemma of not being confident about their retirement outcomes, but are among the wealthiest retirees in the world due to a large proportion of their wealth being tied up i...Read more
Retirement Planning
Self-funded retirees ‘hung out to dry’ by 2020 budget
The Association of Independent Retirees has slammed last night’s federal budget release, accusing the government of overlooking older Australians in its post-COVID-19 recovery plans. ...Read more
Retirement Planning
What are self-funded retirees most worried about in 2020?
The national economy, the value of investments and the ability to manage long-term finances are top of mind of self-funded retirees reeling from the effects of a worldwide economic slump. ...Read more
Retirement Planning
Boost your super in the comfort of your own home
There’s a new way for retirees to top up their super through the downsizer contribution without having to move out of their home – and it’s got the approval of the ATO. ...Read more
Retirement Planning
How you’ll retire depends on personal values as much as dollars
Ever wondered why some people accumulate more wealth than others, even when their incomes are on par? It probably stems from their personal values, writes Helen Baker. ...Read more
Retirement Planning
Intergenerational wealth gap grows to 2-decade high
Falling rates of home ownership, government spending skewed to older Australians and deteriorating environmental factors are causing intergenerational wealth to grow, new research has shown. ...Read more
Retirement Planning
What you need to know to get ahead financially
Australians looking to get ahead are being advised to analyse their financial situation, set financial goals and reduce debt whenever possible. ...Read more
Retirement Planning
How to adjust your wealth strategy during COVID
Investors are being urged to be conservative about spending, reduce debt and be careful of assets that are supported by government spending, as they look to adjust their wealth strategies during the f...Read more
Retirement Planning
Should older Australians downsize their property?
Older Australians face the dilemma of not being confident about their retirement outcomes, but are among the wealthiest retirees in the world due to a large proportion of their wealth being tied up i...Read more
Retirement Planning
Self-funded retirees ‘hung out to dry’ by 2020 budget
The Association of Independent Retirees has slammed last night’s federal budget release, accusing the government of overlooking older Australians in its post-COVID-19 recovery plans. ...Read more
Retirement Planning
What are self-funded retirees most worried about in 2020?
The national economy, the value of investments and the ability to manage long-term finances are top of mind of self-funded retirees reeling from the effects of a worldwide economic slump. ...Read more
Retirement Planning
Boost your super in the comfort of your own home
There’s a new way for retirees to top up their super through the downsizer contribution without having to move out of their home – and it’s got the approval of the ATO. ...Read more
Retirement Planning
How you’ll retire depends on personal values as much as dollars
Ever wondered why some people accumulate more wealth than others, even when their incomes are on par? It probably stems from their personal values, writes Helen Baker. ...Read more
Retirement Planning
Intergenerational wealth gap grows to 2-decade high
Falling rates of home ownership, government spending skewed to older Australians and deteriorating environmental factors are causing intergenerational wealth to grow, new research has shown. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
