Four financial pointers for those planning retirement
The latest global report [PDF] on retirement from HSBC bank has a message about finances for those planning their retirement. Their findings come after surveying 18,207 people in 17 countries, including Australia.
Of course, being global means that not all the results are specific to Australia, but these four messages from the report are universal.
1. Consider all your retirement expenses
It’s difficult to plan your retirement well if you don’t include all your expenses—all possible outgoings.
This was highlighted in the survey when 27 per cent of retirees had credit card repayments as one of their regular outgoings, but only 17 per cent of pre-retirees (aged 25+) expected to be repaying credit card bills in retirement.
2. Start saving earlier for retirement
This is a regular regret that showed up again with 31 per cent of retirees saying they would have started saving for retirement at an earlier age if they could have done anything differently.
Hindsight is better than 20/20 vision, but you can’t go back to fix it. Depending on how far you are from retirement, you can attempt to remedy the situation in some way.
3. Make sure your advice is professional
Among those surveyed, 23 per cent of pre-retirees and 19 per cent of retirees who received retirement advice and/or information got it only from friends or family. While that can be helpful, there will likely be some areas where professional advice is needed.
In Australia, 41 per cent of pre-retirees surveyed had received no advice. The suggestion from the report is that you seek information from many sources, but make sure there is professional advice in the mix.
4. Be prepared for financial ups and downs
There will be difficult financial times in your life. From the survey, 42 per cent of pre-retirees who had started saving for retirement had either stopped and/or faced difficulties saving.
This is the time to “review all your finances and seek alternative ways to help you continue towards a comfortable retirement”. This will not always be easy, but it helps if you take a long-term view.
In retirement, it’s important to get your finances right. This HSBC report helps to highlight weaknesses, which is a good first step in attempting to handle them.
Bruce Manners: author of Retirement Ready?