Ah, retirement… Having the option to work is something that we probably all dream about and why most of us invest in ASX shares in the first place.
Working and making a positive contribution to society is great, but having the choice is a beautiful thing.
We all tend to think of the 'retirement age' as somewhere between 65 and 67. Most of us assume that it's only until we reach this age that we'll actually be obligated to work for our keep in life.
But, a new report from Finder indicates that a comfortable retirement might still be out of reach for many of us, even at age 67.
The report finds that the cost of living crisis has impacted many Australians' retirement plans. Finder found that, in a survey of 555 respondents over the age of 43, 16% of respondents (or one in six) have either delayed their retirement or returned to work over the past two years.
Half of those 16% cited cost of living pressures for this decision.
If we extrapolate this out to the entire Australian population, it could mean that up to 805,000 Australians don't have enough investments or superannuation to voluntarily hang up the proverbial boots.
Here's some of what Finder's resident superannuation expert, Pascale Helyar-Moray OAM, had to say on this report's findings:
There's a growing retirement savings crisis in Australia. Australians dedicate much of their lives to working hard, often dreaming of the 'golden years' of retirement, but for many, stepping back simply isn't a viable option.
How to secure a comfortable retirement
If you're one of those Australians who is worried about funding a comfortable retirement at the age you want, Finder has some recommendations.
Firstly, superannuation is vitally important. The report recommends that all Australians first focus on their savings and spending to find ways to cut unnecessary costs and maximise the wealth they have to put into savings and superannuation.
It also advises contributing as much money as possible to super as soon as possible. That's to fully harness the power of compounding.
The report also advises that Australians take a good look at their super fund (not funds – make sure you only have one) and ensure that it is invested in appropriate investments for their risk tolerance without charging excessive fees.
It also points out that Australians have the option of seeking out professional financial advice if they are unsure about their retirement prospects.
To conclude, here's some closing advice from Helyar-Moray:
Contributing even a little extra to your superannuation can make a significant difference over time. You can do this by salary sacrificing, setting up a regular direct debit into your super on payday or even using a cashback app…
It's also essential to shop around and find a super fund that meets your specific needs and offers competitive fees and investment options. More importantly, choose a find that aligns with your values; you're more likely to stick with it over time.
Building a robust super nest egg is one of the most important things we can do to secure our financial future – so don't be afraid to seek financial advice to make informed decisions about your fund.
