Retirement Planning – Finance
Preparing yourself for retirement life Retirement is the long-awaited dream for many. While there is no fixed retirement age in Australia, some people choose to retire in their fifties while others work to pension age and beyond.
I
f you retire at the age of 65, the life expectancy for females is 87.3 years, whereas men have an average life expectancy of 84.6 years. This life expectancy rate continues to increase as the years go on. Peak body for older Australians, National Seniors, released research in early 2020 highlighting that many older people are worried about outliving savings. The research showed that 53 percent of survey participants were concerned about outliving their savings and women were more worried than men (59 percent to 47 percent). Chief Executive Officer (CEO) of National Seniors, Professor John McCallum, believes the findings really show how older Australians feel when it comes to their financial security. “Australia has one of the best pension systems in the world, yet Australian retirees are still showing high levels of worry that they will outlive their savings,” says Professor McCallum.
what you want to be doing during this new period of your life.
Does that align with your current retirement wealth? What about the lifestyle you want to lead in retirement? The Association of Superannuation Funds of Australia (ASFA) developed Retirement Standard benchmarks to help older people gauge how much they may need a year to live modestly or comfortably in retirement. For instance, to live a comfortable lifestyle as a single person, you would need $43,687 a year, or $61,909 as a couple.
This could include travel and other big expenses, whether you want to lead a modest or comfortable lifestyle, when you want to retire, whether you are wanting to stay at home, downsize or move into a retirement village, and implementing all your estate planning.
Or to live modestly, a single person would need $27,902 a year, and a couple would require $40,380 a year.
Are you ready to retire?
Manage your expectations for retirement between what you want and whether that is actually possible to achieve.
Wanting to retire is different to actually being able to retire. Older people tend to have a set age they want to retire, but is that viable for you? The preservation age in Australia for retiring is from 55 – 60, which is when you can start accessing your superannuation, but you cannot receive the age pension until you are at least over 65 years of age.
These numbers are also based on the idea that you already own your home, no mortgage, and are in good health.
Important decisions Another important consideration is what your home situation will be like for the first decade or so into retirement, and how that may look when you become more frail. Do you intend to stay at home and receive care inside your own house? Does a retirement village seem like a
“This shows a need for better advice and education to help older Australians manage their savings so they can have the confidence to spend their money and enjoy retirement.” While it’s important to plan your retirement financially, you also need to have an overall view of what you want your retirement to look like and YourRetirementLiving.com.au
5
