Financial advice boosts confidence in retirement
Retirement is then, this is now
For many Australians retirement seems a long way off. We’re so busy worrying about paying off the mortgage and maintaining our standard of living that retirement planning isn’t on the radar. For some, it’s not even a consideration.
This lack of preparation for retirement is a symptom of a ‘living for today’ mindset that’s emerged in Australia today. More Australians are foregoing financial planning for regular travel and entertainment and other lifestyle factors which Australians are now confusing with standards of living.
There’s little left over after our lifestyle expenses, so the majority isn’t feeling positive or confident about their retirement plans.
How big is your nest egg?
With couples needing $59,236 per annum for a comfortable retirement and $34,226 per annum for a modest retirement, and singles needing from $23,000-$43,000 per annum for a modest to comfortable retirement, those who aren’t prepared will face a significant shortfall 1*. Especially if you retire at 65 and live for 25 years.
Financial professionals offer a silver lining
The good news from MLC’s Australia today report is that help from financial professionals has an encouraging impact on our financial confidence and security.
Australians engaging the help of financial professionals are more than twice as likely to feel ‘very or fairly well prepared’ for retirement than those without a financial professional. They’re also 21% less likely to feel slightly or not at all prepared.
Those surveyed with financial planners or advisers are also 22% less likely to expect to rely on government support to ensure their financial security (52% with financial advisers compared with 27% without) and are 10% less likely to be relying on an inheritance to ensure financial security (77% with financial advisers compared with 67% without).
What can you do?
If you acknowledge that one day you’d like to stop working while still having control over your lifestyle, think about how much money you’d like each year and what that means as a lump sum. Engaging the help of financial professionals may help you put a plan in place to enjoy the lifestyle you want in retirement.
Important information - Sources:
MLC and IPSOS, Australia today report, July 2016
1 ASFA Retirement Standard, December Quarter 2015