When it comes to retirement, depending on your age it can either feel like a distant goal that you don’t need to worry about or a pressing matter that leaves you stressed and confused.
New findings have revealed Australians are less confident about the prospect of giving up work at the age of 65 compared to last year, with about one third (29 per cent) now saying they don’t believe they will be able to achieve that goal.
A study carried out by comparison website Compare the Market, along with Deloitte Access Economics, measured the ‘financial consciousness’ of 3,000 Aussies to assess their “ability, willingness and sophistication” to change their own financial situation for the better.
Not surprisingly those furthest away from retirement, such as those aged 25-34, were among the most confident about being able to retire in their mid-60s, with those nearing the end of their working lives, aged 45-54, emerging as far less positive, with 40 per cent of them admitting to feeling less sure about retirement than they did 12 months ago.
“Confidence in retirement outcomes changes dramatically with age,” Rod Attrill, General Manager of Banking, told Starts at 60.
“Gen Xers are feeling pressure to build up their pension pots as retirement is on the horizon. With superannuation contributions only becoming mandatory in 1992, it’s no surprise that some Gen Xers worry that their savings look a little slim, especially when we’re told we each need $545,000 in order to enjoy a comfortable retirement.”
However, those over the age of 70, who are most likely already enjoying their retirement, were also found to be confident about that period of their lives.
“The over-70s being pretty bullish about it is an interesting stat,” Attrill added. “They’re now in that retirement space so they’ve adjusted their lifestyle or taken measures to be very conscious about getting through, so they’re quite comfortable about it.”
Another interesting revelation from the study is that just 13 per cent of respondents feel that they are in complete control of their retirement outcomes.
Attrill added that retirement is “not one sized fits all”, suggesting the best way to plan effectively for retirement is to imagine what you want that period of life to look like, so you know how much cash you will need to have set aside.
He added: “I think moving into those retirement years it’s really important to know what you are going to do and how you are going to do it, trying to figure out your gradual transition into that retirement period is pretty important.
“To be able to do the caravan trip and those types of things and do that in a comfortable way with enough money behind you. Because obviously as those years progress, some people aren’t as active as they may now be so having the ability to have the right timeframe to do things that they want to do, whether it’s travelling overseas, going around Australia or doing the caravan thing whilst they have some money and they’re still active is really important for people.
“People I talk to through my general banking role are 65 to 67 when they’re retiring – they may be just starting to have grandkids and those type of things so they don’t want to go travel the world because they don’t want to miss out on that time. So, for example, they probably wouldn’t need as much behind them as others.”
Attrill also said that for those who may be worrying about the likelihood of retirement or how they would afford it, it can be helpful to consider what everyday costs you currently pay out that you would no longer need to part with if you were not working.
“People heading towards that 54 and beyond age group, as you go through day-to-day things; driving to work, paying for parking, getting public transport, start to think about those things that you won’t be doing as you get into that retirement period because that’s going to be saving you money and understanding what your cash flow is going to be like.”
He also advised investing as much as possible, up to the tax free annual threshold of $25,000, into your superannuation account to give your retirement savings an extra boost if possible.
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