Despite the Government recently passing legislation to increase the superannuation guarantee from 9% to 12% by 2019, many Australians are still likely to have inadequate savings when they reach retirement.
While the increase in the superannuation guarantee will certainly help address the issue of superannuation adequacy, it will be of most benefit to those people who are just starting out in the work force and who will receive the increased contributions for a significant portion of their working life. However, for those people who are close to retirement, or a significant way through their working life, the increase will have much less impact.
No matter what stage you are in your working life, the start of a new financial year is a great time to think about getting your financial affairs in order. A key part of that is ensuring that you have strategies in place to give you the lifestyle you want in retirement. The earlier you start planning for retirement, the more likely you are to enjoy the lifestyle you want.
Australians are living longer than ever before, so the importance of having adequate superannuation to ensure you won’t outlive your retirement savings is critical. With an ageing population and the average life expectancy of Australians continuing to increase, the extent to which people can rely on the Government pension as their source of retirement funding is under pressure. In any case, it is important to consider whether the pension would provide you with the retirement you want.
One of the key trends we are seeing emerge is a ‘new breed’ of retirees. Rather than slowing down, baby boomers want to maintain their lifestyle and ‘live it up’ in their retirement. Some might refer to this as the “Rockstar Retirement” (see the comments in the previous post). Many Australians will be lucky enough to spend more than 20 years of their life in retirement, but to afford your desired lifestyle it is important to start planning now.
An important part of what we do is to help clients in formulating and understanding their retirement objectives and strategies. In doing this we look at the particular situation and retirement objectives then look at numerous possible economic and market condition simulations to arrive at a realistic probability of success in achieving the the retirement goals. Whether your goal is having the “Rockstar Retirement” or just a great retirement this is a key factor.
By seeking financial advice now rather than later, you’ll have a greater chance of success in reaching your retirement goals. A financial adviser can not only help you determine appropriate strategies to ensure you have sufficient savings to fund your desired retirement lifestyle, they can also help you determine at what age you will realistically be able to retire and help you stay on track with reaching those goals.