Retirement always seems to be far away; until it isn’t. Many retirees realise too late that they are running out of money much sooner than expected. Therefore, Australians planning for retirement need to reconsider their assumptions regarding how much planning they have to do and how much money they need to live comfortably in their golden years.
Certain factors contribute to this seemingly shorter road to retirement. Australians are living longer than ever before, so their retirement funds need to last longer and the cost of living in the country continues to rise, putting pressure on retiree budgets.
The availability of flexible work options popularised during the pandemic is considered an encouraging development for those involved in the knowledge-worker industries who wish to delay retirement. But even with this work arrangement, some people aren’t able to work as long as they plan to.
In this post, we’ll cover the reasons some Australians retire early and what you can do today to have a comfortable retirement.
Reasons for early retirement
One of the most difficult experiences for older people wanting to remain employed beyond their retirement age is losing their source of income. When you still want to work but become unemployed, it can add to your stress and affect your health.
The most common reasons some Australians retire earlier than intended are:
- Personal health issues
- Being a primary caregiver for a relative or someone with health issues
- Getting dismissed from their job
While these reasons are beyond anyone’s control, there are measures you can take to avoid worrying about not meeting your needs during retirement.
To ensure you don’t run out of money in retirement, you need to take action now.
Aim to take control by planning early
Whether you’re 20, 30, 40 or older, the sooner you plan for retirement, the better. Preparing early for retirement is the best way to avoid the stress that usually comes with inadequate financial planning.
Be realistic about how much money you need to live comfortably in your later years. Maximise your superannuation savings while you’re still working by making additional contributions to your super, taking advantage of any employer contributions, and investing your savings wisely.
You can always talk to a financial adviser if you need help getting started.
With the help of a financial adviser, you’ll find ways of building up financial security and resilience based on your situation.
By working on your financial health now, major life changes like forced retirement won’t become sources of stress and anxiety in the future.
If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.
This information does not take into account the objectives, financial situation or needs of any person.
Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs.