When most people start imagining retirement, they picture a slower pace, more time with family, and finally ticking off those travel or lifestyle goals. What many don’t picture, at least not right away, is the possibility of living well into their 90s or beyond.
It’s a welcome reality that Australians are living longer than ever before, but it also raises an important question: will your savings last as long as you do?
Planning for retirement is about more than working towards a number. It’s about making sure that number is enough to support the life you want, for as long as you need it.
Australians are living longer
Life expectancy in Australia is among the highest in the world, thanks to medical advances, public health awareness and better access to care. According to the Australian Bureau of Statistics, a 60-year-old man today can expect to live to around 84, while a woman the same age is likely to live to around 87. And there’s a good chance you’ll live even longer than that.
This is something to celebrate, but it also means retirement savings may need to stretch further than they used to. It’s not uncommon for retirement to last 25 to 30 years, and in some cases, even longer.
What is longevity risk?
Longevity risk refers to the possibility of outliving your retirement savings.
While the Government Age Pension provides a vital safety net, many people hope to enjoy a lifestyle in retirement that goes beyond the basics, and that’s where proper planning comes in.
The reality is that even with superannuation, many Australians worry about running out of money. Healthcare expenses, aged care costs, inflation and market fluctuations all add layers of complexity. This is why planning early and planning thoroughly is so important.
Are you taking longevity into account?
When preparing for retirement, it’s easy to base your planning on average life expectancy. But the truth is, half of us will live longer than the average. That’s why it can help to take a more cautious approach and plan as though you’ll live well into your 90s.
Here are a few practical ways to support your long-term retirement goals:
1. Top up your super
If you’re still working, consider making extra contributions to your super, either from your after-tax income or through salary sacrificing. Every bit helps, and the earlier you start, the more your money can grow.
2. Be open to change
Your retirement plan doesn’t need to be set in stone. Being flexible, whether that means adjusting your spending, working part-time, or downsizing your home, can help your savings last longer without compromising your lifestyle.
3. Check your Centrelink eligibility
The Age Pension is designed to support Australians who meet certain income and asset thresholds. If you’re eligible, it can be a helpful way to supplement your income and ease pressure on your super.
4. Consider a lifetime income stream
If you’re looking for more predictability in retirement, an annuity or other lifetime income product could offer a guaranteed income that lasts as long as you do. These can work alongside your super and Age Pension.
Speak to a professional who understands
Every retirement story is different, and so is every financial plan. That’s why it’s a good idea to speak with a qualified financial adviser who can take a close look at your unique situation, your goals and the options available to you.
An adviser can help you feel confident that your savings, super and income strategies are all working together to support you, not just now, but for the long road ahead.
Let’s talk about your retirement plan
At APS, our experienced financial planning team is here to help you prepare for a long, comfortable and financially secure retirement. Whether you’re a few years away or already starting to wind down from work, we’ll help you make sense of your options and build a plan that suits you.
Get in touch today to book a chat with one of our friendly advisers.
Written by APS Senior Financial Advisor, Paul Hatzigeorgiadis.
Paul has over 25 years of experience in the financial services sector. Over Paul’s history, he has provided advice to an extensive range of clients from wealth accumulators to pre and post retirees advising them on Wealth Creation, Cash Flow Management, maximising Centrelink benefits in Retirement, Personal Insurances, Debt minimisation strategies and Superannuation. Paul is married with a 12-year-old daughter and enjoys spending time with family and friends. Whether it’s assisting clients to meet their short-term goals or working with them over a longer term, Paul enjoys helping guide his clients with their financial future.