When it comes to long-term retirement planning, there are two major things to think about, according to the editor-in-chief of Business Spectator.
In a recent editorial published by ABC News, Alan Kohler asserted that it would not be wise to rely on superannuation alone to fund your retirement years – and noted that any savings you plan should be considered in line with the length of your retirement.
It's no secret that people are living longer than ever before – but without a savings strategy that accounts for longer life expectancies, Kohler cautions that people may not be preparing adequately enough.
"The cost of retiring, already enormous, is set to soar," he wrote, adding that medical research breakthroughs and the widespread adoption of healthier lifestyle habits – such as many people giving up smoking – will see people live for longer on average in the future than they do now.
ABS figures currently indicate the average life expectancy of an Australian woman is 84 years and for a man, 79.5 years, said Kohler.
He estimates that more than half of retirees will need to budget for approximately 15 to 19 post-work years – and for some people, this period is even longer.
This is why getting the right advice is crucial – and the earlier you start planning your transition to retirement, the better.
A financial adviser can help you through every stage of setting out a retirement plan, from evaluating your current budget and expenditures to helping you identify your goals, dreams and obligations during your retirement years.
Armed with this information, you can then work out a comprehensive retirement savings plan together – designed with your specific needs in mind.
Your adviser can also provide you with guidance on how to make the most of your superannuation balance, putting you in the best possible position for retirement. This advice can include consolidating many superannuation balances into a single fund to avoid paying multiple administration fees and maximising your opportunity to earn interest, as well as making contributions above and beyond those made by your employer.
ipac is one of Australia's largest financial advisory firms and has offices based across the country. A wholly-owned subsidiary of the AMP Group, ipac specialises in research and financial advice that helps clients lead happier, more fulfilling lives.