One of the key challenges for people approaching retirement is adequately preparing for it. The other big challenge is gaining greater confidence in how their finances might look once retired.
Getting the right advice helps enormously with this, and likewise beginning the planning process earlier rather than later will reap rewards.
What are the stats?
A recent survey conducted by Vanguard of more than 5,500 people aged 55-75, across Australia, US, UK and Canada, showed that many reported that they experienced an increased level of satisfaction with their financial position upon retirement.
One contributor to this result was the higher incidence of people within the first 10 years of retirement seeking financial advice, compared with those still up to 10 years away.
Even amongst those who had access to some form of financial advice during the lead up to retiring, some still experienced regret about how well they prepared.
People’s biggest regrets
The biggest regrets of recent retirees included:
- Not saving enough
- Not starting the planning process early enough
- Not spending enough time planning for it
- Not learning enough about superannuation – in Australia, this included those with SMSFs
- Not learning enough about the government benefits available to them
How ready are Australians?
Another recent study by Colonial First State set out to assess how ready Australians are for retirement. While the results indicated that about half (53%) of those surveyed should have enough money during retirement, this included income support from the Age Pension. Once this Age Pension support is removed from the equation, the adequacy of retirement funding dropped significantly to around 17%, a huge difference.
Colonial used the Association of Superannuation Funds of Australia’s (ASFA) comfortable retirement standard, which is currently $43,372 pa for singles and $59,619 pa for couples, to define adequate retirement income.
Again, this emphasises the need for longer term planning and getting the right advice to ensure you give yourself the best chance of having enough in retirement.
Where to start
Some things you should consider to get this underway include:
- How much retirement income you will need
- How much of this will be provided by your current savings
- The risks and opportunities you will face in the lead up to retirement, and how to deal with them
- How to structure your wealth to your best advantage both before and after retirement
- Protecting your assets in the event of adversity
So, take positive action and get a head start on your retirement, and call your financial adviser today!