Don’t Panic About Retirement, Prepare

Category: Manage Finances

For the past year or so, I have made it my business to conduct an interesting social experiment.

When I am with friends, or extended family members, I ask them about retirement: what they see their life like, what kind of person they would like to be, and what experiences they would like to have.

The answers vary depending on the age of the person I am asking. Younger people tend to predictably imagine themselves travelling the world, loving not working and doing whatever they please.

Friends my age in their 40s and 50s tend to focus on what they want for their kids, and what else they might do outside of their traditional work.

But one thing they all share is a look of panic, when I ask “will you have enough to retire on?”

Very few, no matter their education and earning capacity, have confidently said to me “yes”.

Why? Well, for a start, people are confused about how much they will need as they don’t know how long they will live for, or what that will cost.

I ask them to tell me what sort of life they would like to live, and what this might cost per month. This gets a response, as they start figuring out the travel costs and their life expenses. These may be $5000 per month, or $60,000 a year.

Then, they multiply that out by the amount of time they could live in retirement. This will most likely stretch into their late 80s or early 90s if they are in good health. It’s at this point, the penny starts to drop.

Simple calculations about the minimum super contribution and the years they have left to put enough away to save starts to demonstrate that the life they are imagining is not going to happen unless they change something now.

And the sooner people have this realisation the better. The Association of Superannuation Funds of Australia (ASFA) says that the definition of a comfortable retirement for those people who own their own home, and are relatively healthy, is around $43,000 for a single person, and almost $60,000 for a couple.

For those who don’t own their home (which is becoming increasingly more difficult) this number increases significantly.

And when you think about the definition of comfortable, it’s not exactly high-flying lifestyles.
It’s why the kind of tech that groups like GROWSuper are putting out, which uses an app to show what you will have in retirement with simple graph based on your super contributions, are so important to growing awareness from an early age about planning for the future.

No matter whether it’s your teenage children or yourself at 50, it’s time to do these simple calculations and start to formulate a plan.

Without it, the look of panic when asked the question of “will you have enough?” is more than justified.

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Vanessa Stoykov

Vanessa has been passionate about writing and storytelling since her days of hiding under the doona with her torch to read after bedtime.
Kathy Skantzos

Kathy is a yoga-loving world traveller who also happens to moonlight as a business journalist and writer. She was the finance editor of news.com.au and the Managing Editor of CEO Magazine (Asia) before joining Vanessa and the evo squad.
Shayne Sommer

Shayne is second dan black belt in karate, and a budding romance writer with a difference. Why? Because she writes romance stories that always have a money lesson.
Antoinette Colbran

Specialising in stories for 50+ women, Antoinette draws from her own experiences to help other women avoid the pitfalls and see the benefits of understanding their money situation.
Michael Crooks

Michael Crooks is a more than 20 year writer and documentary maker who has worked with Time Inc and the BBC, who wants to expose the truth from real victims of financial crime to help others avoid their mistakes.
Kim Payne

Kim Payne has spent the past three decades as a speaker, trainer, business coach, and consultant in financial services. She has worked with and transformed hundreds of brilliant, educated, high achievers who are chronically under-living.
Rebecca Pritchard

Rebecca Pritchard is on a mission to help men and women achieve equality when growing a family.
Antony Perring

Ant is a writer, designer and business builder with a love of food, design and good living. He writes on food and money in an easy to do way.
Julie Hyde

Julie Hyde is a leader of leaders. A disruptor and a powerful people enabler who empowers leaders to make big things happen.
Joshua Pennell

As a Dad to four kids and a business owner, Josh is passionate about family and finances and is known as The Family Finance Guy.
Sid Lal

Sid is a serial entrepreneur who set up his first business when he was still in University. Since 2009 he has been heading Bruce Clay, first in India & more recently in Australia.
Lou Johnson

Lou Johnson believes in the power of sharing stories to build empathy, understanding and connection. Growing up surrounded by books and storytelling, alongside her drive to make a difference led her to a highly successful career in book publishing.
David Rae

Dave is a CERTIFIED FINANCIAL PLANNER® professional and has been a financial adviser since 2003. He works with a range of clients and has a strong focus on ethical and sustainable investing.
Natallia Smith

Natallia specializes in assisting pre-retiree single women—whether they are never married, widowed, separated, or divorced—understanding deeply the importance of financial stability during life's pivotal moments such as separation, divorce, retirement, and the loss of a loved one.
Mark Hoy

With over 15 years of experience in financial services, Mark established Wollemi Wealth Management in 2013. His business is built almost entirely on referrals and word of mouth — a testament to the trust, integrity, and long-term relationships he forms with his clients.
Derek Gascoigne

Derek Gascoigne is the State Manager for UniSuper Advice in Victoria and Tasmania. Derek has been with UniSuper for over 15 years, and his career in superannuation and financial services spans 27 years and counting.
Annika Bradley

Annika Bradley is Head of Advice Strategy, Research & Technical at UniSuper. She brings over 20 years of experience across investments and wealth management in both the public and private sectors.
Wayne Leggett

Wayne has been a recipient of numerous industry awards and was one of the first to qualify as a Certified Financial Planner (CFP). He has been heavily involved in industry affairs at the highest level, including serving as national president of the Association of Financial Advisers (now FAAA).
Conrad Francis

Conrad Francis is the Founding Director of Inspired Money, a Perth-based financial coaching and financial planning, mortgage broking and money coaching firm he established in 2011.
Andrew Beks

Andrew Beks is a Chartered Accountant and the founder of Simplified Business and Accounting.