Time is the great factor when it comes to having enough to finance a comfortable retirement.
The sooner you get started, the easier it is to accumulate a significant sum.
A comfortable living standard requires, according to some estimates, an income of about $1,000 a week. To generate this income, you need about $670,000 as a lump sum.
Australians are lucky to have compulsory superannuation payments made by their employers so they naturally build up a nest egg over the course of their working lives, but many people don’t give much thought to how much this will amount to by the time they retire.
A financial planner can help you navigate the issues, and help you set goals so you can be comfortable knowing you’re working towards a better retirement. Here are five reasons why you should see one this year:
1. Clients of financial planners are better off in retirement, studies show
Research shows those receiving financial advice are better off at retirement than those without it. A 30-year-old would save an additional $91,000, a 45-year-old another $80,000 and a 60-year-old $29,000 more than those without a financial adviser.
2. Longer life expectancy means more costly retirement
When the age pension was introduced in 1909, a 65-year-old Australian could expect to spend between 11 and 12.9 years in retirement. Today, men of the same age can expect to live for another 19 years, women for another 22 years, according to the Australian Bureau of Statistics.
3. You’ll be better able to maintain your lifestyle
A couple wanting a comfortable retirement needs $57,665 a year while those seeking a modest retirement lifestyle need $33,358. Modest is defined as better than the Age Pension but still only able to afford fairly basic activities. Comfortable means having a range of leisure activities and to have a good standard of living through the purchase of such things as household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.
4. You can give yourself the option of retiring early
Many want to get out earlier, depending on their financial security. A survey showed that 40% of people want to retire before age 65. To do that you’ve got to have the financial side sorted out. A financial planner will be able to advise you on the steps to take if you want to at least give yourself the option.
5. You’ll need more if you’re a woman
They live longer than men in Australia with an average life expectancy of 84 years, five years more than men. But women currently have significantly less funds saved . The Association of Super Funds of Australia reports that the average retirement payout in 2009-2010 for women was $112,600 compared to men with an average balance of $198,000. The reasons are varied. Women tend to move in and out of full-time paid work more often than men and in most industries are paid less.
If you’re thinking about your retirement goals, talk to a Commonwealth Financial Planner today and you can start to make it happen. They can create a tailored plan to help you turn your goals into reality so you can retire when you want to – your Can Day.
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