65 is often touted as the magic number to kick up your feet.
But in the transition to retirement and the golden years themselves, there are many different ways of funding retirement. In the decision to retire – you are only as young as you feel.
Increasing life expectancy means that people are living longer in retirement. The idea of supporting yourself without working for 20 plus years has more than half of Australian retirees worried that they will outlive their savings.
But the meaning of retirement is shifting with changing demographics and patterns of home ownership and many Australians are asking, when am I ready to retire?
People’s individual circumstances are as unique as their thumb print. Home ownership, health, family responsibilities and lifestyle standards and expectations are among the top factors that determine when you are ready to retire.
It’s more than super
If you’re looking for a number, the Association of Superannuation Funds of Australia (ASFA) publishes quarterly figures for both a modest or comfortable retirement for singles and couples that is benchmarked against inflation.
While the discussion about funding retirement is dominated by superannuation, super is only one part of the puzzle. Australians are able to enjoy their retirements by making up any superannuation short fall with Centrelink entitlements and part time work.
Demographic changes also mean that the very concept of retirement is evolving. When the aged pension was introduced in Australia in 1909, life expectancy was significantly below retirement age – and now it is significantly above. Additionally, since compulsory superannuation was only introduced in 1991, many boomers are now reaching retirement age having only benefitted from super for half their working lives.
It’s more than a number
What it really comes down to is a question of maintaining a desired lifestyle. That number is incredibly difficult to pin down because our tastes and aspirations are all so different.
For some the idea of joining the grey nomads is appealing, while for others its strolling down the champs-Elysees before a picnic under the Eiffel tower at sundown. For others, maintaining a connection to their profession through part time work or consultancy is a great way to keep active and maintaining their community.
According to the Fin, older workers are the fastest growing section of the workforce. After all, being ready for retirement requires a mental readiness as well as financial and you may opt to ease into retirement.
When planning your retirement, it pays to have a plan. There are so many considerations and its worth chatting to a financial planner to get your money in the right place at the right time as you prepare for your golden years.
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