What is the magic number you will need to retire with?
Retirement planning can seem like a puzzle with pieces that don't always fit. According to a recent report from Colonial First State (CFS), the average Australian believes they need a hefty $1.6 million saved up for a comfortable retirement.
Kelly Power, the Chief Executive of CFS Superannuation finds this figure surprising, especially since it jumps to $2 million for those people without financial advice.
Power also notes that ‘compared to the Association of Superannuation Funds of Australia (ASFA) retirement standard, which recommends a super balance of $690,000 for a comfortable retirement for couples and $595,000 for singles, the CFS survey findings reveal a general lack of understanding of how much is needed.’
The report suggests many Australians lack a clear picture of what’s needed for retirement and how to navigate financial systems effectively.
Moreover, there’s a conflict between retirees’ desire to pass on wealth to their loved ones and the government’s vision of superannuation solely supporting dignified retirements. This tension highlights broader concerns about living costs, longevity risk, and intergenerational wealth transfers.
Despite these challenges, most Australians are reluctant to seek help or ask important questions about retirement planning. The fear of not knowing how much money is needed or feeling embarrassed about financial matters is common.
Interestingly, Australians who seek professional financial advice seem to fare better in retirement enjoyment and timing. They are more likely to retire when they choose and find retirement more fulfilling.
However, the research also shows that traditional approaches to retirement planning might not be enough. People have diverse needs and preferences, from working part-time in retirement to pursuing passion projects with reduced hours.
To address these complexities, personalised advice and tailored guidance are crucial. It’s about finding the right balance between digital tools and personal conversations to navigate the intricacies of retirement planning effectively.
Retirement planning isn’t just about hitting a specific savings target. It’s about understanding your unique goals, concerns, and options to craft a retirement that suits you best.
What is your magic number?
Philip Hall, Head of Financial Planning , Senior Adviser.
Freedom = Travel and Beach Time.
Phil is an experienced planner who enjoys working with clients to meet their financial goals now and into the future. Having previously been a teacher, Phil educates and guides clients; enabling them to make informed decisions to build, protect and manage wealth through a broad range of financial strategies.
Phil grew up in Hobart, but has worked and travelled widely overseas and interstate prior to returning and settling in Tasmania. He commenced working in the Financial Services industry in 2002 and has completed an Advanced Diploma in Financial Planning, several specialist courses in ASX listed products, SMSF, margin lending and is a Certified Financial Planner®. Phil enjoys travel, getting outdoors and spending time at the beach with his family.
Masters of Financial Planning, Bachelor of Education (Honours), CFP®, LinkedIn
