ABS data shows that there were 130,000 retirees in 2022*, at an average of 64.8 years of age, but whether you’re five years or fifty years away from when you want to retire. Here are some of the most important lessons.
Lesson #1 – You can’t always control when you’ll retire
The stats show most people retire because they’ve reached an age where they’re eligible for super or a pension (22.6% of men, 13.2% of women). But not everyone gets to end their career on their own terms, 13% retire due to a sickness, illness or disability. And sadly, 5%take themselves out of the work force when they’re retrenched and there’s no more work available for them elsewhere.
What can you learn from this? Well, risk mitigation is the key. That means adding things to your plan that’ll ensure you’re taken care of if you do get injured or sick and have to retire early. Or if you’re in a field of work where the job market is tight and highly competitive. One of these things might be insurance.
Lesson #2 – You might not be as financially independent as you want
Many Australians aim to enjoy a self-funded retirement. But the stats show that most people still rely on a government pension or allowance to get by – 54% of men and 45% of women, to be exact. Only 33% of men get most of their money from their super or private pension.
There are actually a couple of lessons here. First of all, even if you’ve started building a good nest egg, it pays to know how Centrelink works in general. You may have to deal with them after all, for reasons out of your control, such as a market crisis or living longer than your life expectancy. Second, it’s worth considering building more than one source of retirement income.
Lesson #3 – You might end up back at work
Retirement isn’t final for everyone. Many retirees who go back to work do so because they need the money, while some just get bored and need something to do. There are others who had retired from the work force but come back to part-time or full-time work.
Going to back to work of your own volition is fine. Not everyone can spend all day doing the things they only had a few hours a week for in the past! What you want to guard against is ending up back at work because of financial need. Part (not all) of this is not undershooting your retirement income goal. To do this, you’ll need to know what to budget for, and where to find realistic costs.
BUSSQ in house team of Financial Planners can help you work through your retirement goals, so you can feel confident coming into your retirement years. Call us on 1800 692 877.
