Unfortunately, the longer you leave it, fewer options will be available to you when you do finally “bite the bullet.” A majority of Australians do make it to retirement so please don’t count on being hit earlier by a bus!
On average, you’ll be retired for many years. Life expectancy for 65 year olds is about 20 years now and, with advances in medicine, this will get longer. Even if you have to work until 70, your nest-egg will need to be significant to last the distance.
And, in case you hadn’t noticed, pensions are harder to qualify for as the population ages and funding is progressively reduced in relative terms. Looking after those who can’t look after themselves is still a popular theme with politicians but the practicalities will lead to a different rhetoric in the future. Failing to provide for yourself may become financial suicide.
Some (particularly those with Baby Boomer parents) may be counting on an inheritance. Baby Boomers have been great wealth builders but they are also great spenders so there’s a good chance your planned inheritance may end up in the pockets of someone else.
Superannuation is hailed as the solution to all retirement funding in Australia. As good as the Australian superannuation system is, 2012 research by Rice Warner Actuaries calculated that there is almost a $1 trillion superannuation shortfall. Even those who are fortunate enough to have been covered by the Superannuation Guarantee system for their entire working life and have been in full-time employment are not immune. It is projected that their superannuation balances will also be inadequate so if you have been on maternity leave, part-time/casual employment or been out of the workforce for any reason, your situation will be even more precarious.
Fortunately there are strategies you can use now to bolster your superannuation and retirement nest-egg but taking action early and seeking our assistance are the keys to success. Early action will give your retirement investments time to build and we will provide comfort that you are still on the right track. We will also be able to guide you through the rule changes which are inevitably coming.
Remember, the best time to start planning for your retirement is the day you start earning an income. The second best time is today. Don’t let 5 (or more) years slip by before you take action.
Of course, it is not possible in these 480 words to provide specific, actionable advice applicable to your specific situation. The only advice we are giving here is that you call us for an appointment so we can ensure your retirement plans are appropriate for you.