Retirement planning has recently been highlighted in several surveys, with responding Australians providing worrying results for their futures after work. An ideal lifestyle depicted by many Australians in their retirement may not come to fruition, as a direct result of lack of planning.

Australian’s money will be depleted after a measly 10 years of retirement, according to a global survey, leaving people reliant on the age pension alone. A frightening 46% of Australians were also found not to be confident in their ability to sustain a comfortable standard of living once they have retired. The statistics are astonishing considering the services that are available to assist in preparing for a second financial retirement.

The common mistakes made by Australians when thinking about retirement relate to the underestimation of costs associated in later life, a preference for saving in the short term and the most prevalent of all; insufficient planning.

Underestimation of costs in retirement

Many Australians underestimate the numerous costs that will be included when retiring, and rely on the fact hobbies will occupy their interest for the remainder of their non-working life. Realistically, we have many costs that need to be considered which includes methods of mental stimulation, physical and social activity, not to mention the rising health expenses that are associated with growing older. The prospects of personal learning and development are also overlooked, but should be considered thoughtfully to adequately plan for retirement.

Focus on the short-term

It is not surprising that people tend to their short-term goals with undue consideration for the more important long term goals – namely retirement. A survey by REST also demonstrated that only 14% of Australian boomers declared themselves as financially prepared in regards to retirement. These statistics are evidence enough to encourage people to start thinking about their retirement, and plan their finances before it is too late. It is time to be adequately prepared for retirement, and sleep soundly knowing that your finances are in order.

Insufficient planning

Surveys have revealed that 44% of Australians are planning inadequately or not planning at all for retirement. This staggering figure reflects the critical need to start planning early, with the research outlining that many wished they had started saving earlier. Australians that have sought professional financial advisory services to assist in the planning of their retirement have been found to increase their savings by five times the amount of those who don’t plan.

The strong correlation that exists between financial planning and saving encourages the need to start early with retirement planning. The earlier that people start planning, the earlier they will be saving money to maintain a preferred standard of living in retirement.