Australia currently has about four million retirees, with another 670,000 people intending to retire in the next five years. Retirement Matters, a Dialogue Paper written by actuaries Andrew Gale and Stephen Huppert, argues that the time for Australia to reimagine retirement is now.
In brief:
- The key retirement challenge for many people is longevity, which can make them worry about running out of money and live more frugally than they need to do.
- To support longer retirements, Australia’s so-called Three Pillars of retirement funding – Age Pension, compulsory superannuation, and voluntary savings – should be expanded to better promote additional income sources retirees can draw on. This could include salaries and wages from part-time work or accessing income from equity in the family home or other property if they can and wish to do so.
- People would benefit from a Help, Guidance and Advice framework for both the transition to retirement and in life after full-time work. Such a framework would build on recommendations made during the recent Quality of Advice Review (QAR) to improve the accessibility and affordability of quality financial advice.
- While financial considerations typically take centre stage when planning for retirement, people should take a holistic approach and remember to plan for their health needs, and how they will maintain their sense of identity and live a meaningful life.
Read the report here
