There’s constant conjecture regarding superannuation and retirement, so before you take anything as gospel, here are some retirement considerations:
I will need less money to live on in retirement. Hold your horses on that one. How much time a week do you currently spend at work?
With extra leisure time to occupy yourself, spending can rise as you look to fill in time with new pursuits. Then don’t forget, fridges, stoves and hot water cylinders rarely last as long as you!
I’ll downsize my house and live off the difference. Not a bad idea, but consider the five million baby boomers currently out there.
The first wave have turned 65 this year, if cash poor, house rich boomers look to unload their properties to unlock equity, a wave of sellers can only depress the housing market. A dream price may not come!
Upon retirement I’ll switch my superannuation to be defensive. Fantastic, if you know your exact lifespan! However, superannuation needs to last throughout your retirement and it may only do that with further growth.
Divide your super balance by how much you expect to spend a year, what do you have? Without further growth, the answer shows how many years before you run out of money and that’s without factoring in inflation.
I’ll live in my own home throughout my retirement: While we all hope for the best of health, our bodies and minds can let us down as we age. Assisted living isn’t cheap and the sad reality is that care may be required beyond the capabilities of family members.
I’ve got plenty to do. Sometimes those hobbies don’t stretch as far as you think. Look for further pursuits to keep your mind and body active.
Healthy retirees have plenty to do and they enjoy themselves.
Complaining about boredom should remain a teenage catch cry!
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances. If you’d like help with your retirement, we ‘re one of only six certified fiduciaries in Australia.
