The decision to retire after a lifetime in the workforce is a major event and for many people it is a very anxious time.
There’s the change in routine, the potential loss of an important social network and that feeling of ‘purpose’, and foremost for many people is the very real fear that they will outlive their money.
The main guide has always been the government’s Life Expectancy Tables, but it is important to remember that these are simply statistics that determine a very broad average indeed. They fail to factor in improvements in mortality rates, and they cannot possibly take into account other critical factors such as our surroundings, our personal health and medical history, and family history of longevity.
The first step is to be aware of this risk – it’s been dubbed Longevity Risk. One site, www.mylongevity.com.au offers a calculator into which you can add your specific details to find a more realistic estimation of your life expectancy. And once armed with a new reality your retirement and savings plans should be reviewed, as they should regularly in any event.
So, what to do? In my experience, the tried-and tested Rules always apply. The earlier you make your plans, and the earlier you start to save for retirement, the easier the job becomes. And that’s what we are here for!