Older man swimming in ocean

Finance expert Noel Whittaker says most people seeking advice on how to prepare for a comfortable retirement are often failing to maximise their biggest asset.

Noel, who is a finance and investment expert and author of the international bestseller Making Money Made Simple, says an individual’s health is their biggest asset and they should ensure they prioritise their health into retirement and beyond.

‘I get about 50 emails a day for my newspaper column (which runs in publications including The Age) with queries such as, "How do I protect myself from the next global financial crisis?",’ Noel says.

‘They are focusing on the wrong things. It's well known that 80 per cent of health conditions are certainly in their hands. Health in retirement, basically, is about exercise, diet and relationships. They're the big three and that should be your focus.’

Alternative paths

Of course, there are other key ways people should prepare for a successful retirement, he says.

‘I think it's important people go to a pre-retirement seminar. Often these are run by financial advisors, so you need to make sure that they aren't trying to sell you something that's the wrong thing for you, but you need to make big decisions about things like: "Do I stay with superannuation or not?"

Because the way our tax rules work, a couple could have $800,000 of financial assets and not need to be in a super fund, but a fund may give a better return than they could get themselves.

‘Do you need a self-managed fund? Most people don't. Really, you need half a million before considering it, but I also think it depends on the person. If you love DIY share investing, and you're good at it, certainly have a self-managed fund.

What about property?

‘A lot of business people have their business premises in a self-managed fund and you might be in investments you can't get elsewhere. I've got investments in property syndicates and you can't get them outside a self-managed super fund.

'Ensuring you have enough cash on hand to fund two-or three-years’ worth of planned expenses before retiring is really important,' Noel says.

‘Because, historically the market has four bad years and six good years and the last thing you want to do is be forced to cash in good shares to fund your retirement when the market's having one of its normal downturns.

‘Now, this could include income from a share portfolio returning, say, $30,000 or $40,000 a year because you know it's coming in.’

Hard questions

Noel says, ‘Retirement is like marriage; you should ask the hard questions before you take the plunge.’

And, probably the hardest ‘hard question’ people should ask themselves is whether they should retire at all, or to what degree they should back off their working hours.

‘People need a sense of purpose; a reason to get out of bed in the morning, and work provides a sense of purpose. It's also a sense of pocket money, as well. These days, you can earn a $150 a week without your pension being affected,’ Noel says.

‘And that can be useful.’