How you’d like to spend your retirement is as unique as you. From the big life changing goals, to the smaller, more personal ones that give your life meaning.
There’s no defined age you must retire by, and it isn’t just about your finances. Your state of mind, where you live, how you spend your time as well as your goals, all play a big part.
Australia has one of the highest life expectancies in the world, and it’s likely to increase well into the 90s over the next 40 years [i]. Meaning we could be looking at around 30 years in retirement.
So whatever your retirement goals are (like travelling, having a sea change, caring for family or working part-time), it’s important to be prepared financially.
Assuming you own your own home, recent research shows that to retire comfortably, couples will need about $640,000 as a lump sum to retire on [ii].
Yet, a recent survey by Roy Morgan shows many Australians aged 50-64 may not have the amount they need to retire comfortably at 65, and in fact many may still be in debt [iii].
It can be easy to feel overwhelmed by these figures, but your finances may actually be in better shape than you think.
There are a number of things you can do yourself now, that can really make a difference to your future retirement – both financially and mentally. That includes thinking about how you’d like to manage your income and lifestyle to reflect your changing needs. Here are some ways to get started:
Too many options can make planning difficult, so it’s good to get a clear idea about the lifestyle you want and the top things on your list, including:
It’s a great idea to get your finances organised sooner rather than later. Some of the things you can work on now include:
Have a realistic look at how you can achieve your goals, and live the lifestyle you’d like within your budget. You may need to reassess some things in favour of others, or be stricter on the smaller things (like eating out) so you can enjoy bigger things in retirement (like a holiday).
Once you’re clear on your goals, a plan will help you step out how you’ll get there. It can make all the difference.
Most of us need some help to create a plan for our retirement goals. And making the most of your super, investments, government entitlements and incentives can be hard to do on your own.
We can help you:
[i] Australian Government Treasury Department., 2015 Intergenerational report. https://treasury.gov.au/publication/2015-intergenerational-report/chapter-1-how-will-australia-change-over-the-next-40-years/
[ii] ASFA, Retirement Standard Summary, December 2016. The lump sums required for a comfortable retirement assume that the retiree/s will draw down all their capital, and receive a part Age Pension. All figures in today’s dollars using 2.75% AWE as a deflator and an assumed investment earning rate of 6%. They are based on the means test for the Age Pension in effect from 1 January 2017.
[iii] Roy Morgan Research, State of the Nation Australia spotlight on finance risk, August 2016. © AMP Life Limited. First published 11 October 2017
© AMP Life Limited. First published 11 October 2017