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Imagining your retirement can be exciting, even if it’s a long way off. Who doesn’t want more time to spend on hobbies, travel and with friends and family? If you’re in the know, you’re already aware – it’s important to have a plan if you want to hit your retirement goals. What you might not realise is that your plans need a bit of risk management built in if you’re going to get there.

The Australian Bureau of Statistics (ABS) came out with some interesting stats just before Christmas last year. Basically, they showed that a lot of Aussies don’t end up with the retirement they planned for1. The survey, based on people aged 45 or over who are retired (or had been), unveiled some worrying trends. But on the upside, you can learn from the stats. Whether you’re five years or twenty-five years away form when you want to retire. Here are some of the most important lessons.

Lesson #1 – You can’t always control when you’ll retire

The stats show that most people retire because they’ve reached an age where they’re eligible for super or a pension (36% of men, 22% of women). But not everyone gets to end their career on their own terms. But 21% of men and 12% of women retire due to a sickness, illness or disability. And sadly, nearly 10% take themselves out of the work force when they’re retrenched and there’s no more work available for them elsewhere.

What can you learn from this? Well, risk mitigation is the key. That means adding things to your plan that’ll ensure you’re taken care of if you do get injured or sick which sees you needing to retire early. Or if you’re in a field of work where the job market is tight and highly competitive.

Lesson #2 – You might not be as financially independent as you want

Many Australians aim to enjoy a self-funded retirement. But the stats show that most people still rely on a government pension or allowance to get by – 49%, to be exact. Only 33% get most of their money from their super or private pension. And that’s not even taking in to account the fact that some of those 33% may get at some point a part pension from Centrelink.

There are a couple of lessons here. First, even if you’ve started building a good nest egg, it pays to know how Centrelink works in general. You may have to deal with them after all, for reasons out of your control. Second, it’s worth considering building more than one source of retirement income.

Lesson #3 – You might end up back at work

Retirement isn’t final for everyone. About 42% of retirees who go back to work do so because they need the money, but 32% find they are bored and need something to do.

Going to back to work because you want to is fine because not everyone can spend all day doing the things they only had a few hours a week for in the past! What you want to guard against though is ending up back at work because of financial matters. To avoid this, you’ll need to know what to budget for, and where to find realistic costs.

If you need somewhere to start, visit our retirement section on the website. Also, don’t forget we have financial planners who can assist with helping you plan for retirement.


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