Retirement should be an exciting new time, but uncertainty can make it a little scary. Do you know how far your retirement income will take you?
Will my money go as far as I need?
Australians are living longer than ever – the average life expectancy is increasing. Men at the traditional retirement age of 65 should expect another 19.5 years, whereas women should expect another 22.3 years. Your money will need to last as long as you do!
Having lasting retirement income can help bring stability and security to your future retirement planning needs.
You’re changing your perspective from accumulating a balance to using your super as income. How long will your balance last if you want to live a comfortable lifestyle compared to a more modest lifestyle? If you want to do a lot of travelling, your balance will not last as long as someone who prefers to stay in one place.
What can I do to make my super last longer?
If you think you might outlive your finances, there are some things that you can do to help your balance last longer:
- Before you retire, make additional salary sacrifice (before-tax) or after-tax contributions to super
- Delaying your retirement by a few years can allow you to continue to build your super balance through contributions and allow investment returns to continue to grow
- Review and adjust; a more aggressive growth strategy can result in higher returns but also means you have a higher risk of a negative return
- If you’re eligible for the Government Age Pension, that may be a way to supplement your super retirement pension income
- You may need to adjust your expectations about the level of income that will be available to you
- If you’ve taken a career break to raise a family, explore the possibility of returning to work.