Retirement is a big deal. It is the closing of one chapter and the opening of another. What were your expectations going into retirement? Did they end up meeting your expectations? Are you close to retirement or just thinking about it? What are you planning for the big day?
According to data from Mercer, 40 percent of Australians were forced to retire before they wanted to and were ready. Of those surveyed, most anticipated they’d be retired by 68 when in reality the real average age for retirement in Australia is 60.
After interviewing over 1,500 Australian aged between 50 and 80 who had not yet received a full aged pension, it has become clear that retirement is not always the dream it is cracked up to be. It is likely that retirees will outlast their savings by more than five years on average, but only a small amount are aware of it: 1 in 3 retirees are concerned about their longevity but still can overestimate their life expectancy. How long do you think that you will live for? Have you considered the implications it could have on your retirement fund?
For most of us, travel is our biggest dream once we retire. We dream of travelling the world with no strings attached or driving a caravan around the country. We also want to improve our health and fitness, buy a new car and support our family, but will we able to do all of this or is it just that: a dream?
The reality is that even if we plan to stop working, not all of us do. 20 percent of pre-retirees plan to return to work so that they can make their super stretch further, while 73 percent of 50-80-year-olds will only be able to afford to semi-retire or wind-down to full retirement.
It’s not all bad news, though, as 68 percent of retirees can afford to travel on a regular basis. When compared to only 25 percent who aren’t yet retired, and 40 percent could afford to purchase a new car, quite different to those in pre-retirement who thought it was unrealistic financially (76 percent). It’s also good news for our families because 35 percent of survey participants said their retirement savings went towards gifts. With all that said, these statistics show we are still becoming increasingly pessimistic about retirement before we make the jump as pressures mount and the cost of living rises.
Although overall retirement can be enjoyable, it does require a good deal of planning, especially if you’re hoping to retire and not return to the workforce full-time. Two in three of the retirees surveyed are living frugally because they are worried that they will not have enough to last, though 54 percent said they would live on the meagre age pension when their savings ran out.