Figures have just been released showing that Australians are living longer than ever before, which begs the question – is your retirement plan good enough?
People tend to enter retirement thinking they have enough super to see them through the years, but the reality is that this might not be the case.
Data from the Australian Bureau of Statistics (ABS) shows that the average male is now living until 79.7 years, or 84.2 years for women.
With the average life expectancy now at 81.4 years, there is further pressure on people to make sure their retirement income is sufficient.
How much will retirement cost?
The truth is that there is no magic formula to determine how much money you will need to retire – it varies quite considerably from person to person.
A good first step is to think about what amount you will need to retire on, which means adding up essential daily or weekly costs.
Only then can you realistically start thinking about setting money aside for non-essentials – if you've always planned on going on a round the world trip when you retire then definitely factor this in.
Whichever amount you decide on, it is best to over rather than underestimate – a financial planning advisor will be able to help.
When should I start retirement planning?
The easy answer to this is the sooner the better!
Although retirement planning can seem a little premature while you're still young, the earlier you start to make provisions for your future, the faster you can start reaping the benefits.
Paying into a super fund as soon as you are able will provide you with more money in retirement, which will make your post-work years that little more comfortable.
Even if you can't afford to pay in large amounts of money from the start, smaller contributions are certainly better than none at all!
Is it too late to start planning retirement?
Although it is advisable to plan retirement early on, this should not deter older people from making provisions.
Going in search of professional superannuation advice is the best way to see where you stand and discuss what you will need to do to maximise your retirement funds.
Whatever you do, don't assume that everything will work out in the end – it's up to you to shape your finances in retirement!
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.