Australians enjoy one of the longest life expectancies in the world. Around 3.7 million of us (15 per cent of the population) are aged 65-plus, and today’s 60-somethings can expect to live for another 20 years on average. That’s an increase of more than eight years for men and almost 10 years for women since the turn of the century.
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However, a new study by National Seniors Australia (NSA) shows that our savings behaviour is not keeping pace with increasing life expectancy. We need to make earnings from 40 to 50 years in the workforce extend across 80 to 90 years of living.
The study found what matters most to people about their finances in retirement is having regular, constant income. Conserving capital to leave money for the next generation is becoming less of a consideration for many Australians.
Nonetheless, many of us expect to maintain similar spending patterns in retirement as we did in the workforce. Crunch time often comes as we head towards retiring age, and the reality of what may be a limited nest egg becomes more obvious.
It all highlights the need for good planning. Part of the answer lies in committing to saving for retirement while you have enough income to do so. But it also hinges on how you use your super and other investments once you leave the workforce.
A balance between a quality retirement and running out of funds prematurely is a juggling act that calls for expert financial advice. It’s not something you should put off until you’re ready to walk away from the workforce. Seeking advice early can be one of your best investments.
