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Savvy seniors focus on retirement risks

Challenger logo Challenger 27/11/2017
© Challenger

The road towards retirement can seem as easy as making sure your superannuation contributions are hitting your account each month or quarter. 

But ensuring you're set up to really enjoy your post-career years needs more thought — particularly in light of a recent study from National Seniors Australia. Australians are now living longer than ever. 

Therefore, maintaining a high standard of living during a longer lifespan while still being able to leave something for kids and grandchildren is not as simple as it used to be.

The survey of 5,770 Australians – making it one of the largest comprehensive surveys of Australians aged 50 and over – highlighted that older Australians are aware about the risks of living longer.

When asked about their finances, 84% of respondents said ensuring a constant stream of regular income to cover essential needs in retirement was one of the most important factors for them.

Other key priorities for retirees were ensuring their money lasts throughout their lifetime – 77% rated it as very important, followed by paying for aged care and medical costs (71% rated it as very important).

Given these challenges, many retirees have realised that bequests are no longer central to retirement planning.

Only 3% of retirees plan on passing on all their savings in an inheritance.

Over three times as many say they anticipate spending their entire pot during their retirement.

Though almost half (47%) are intending to preserve some savings for an inheritance and spend some during retirement.

Therefore, these savvy retirees could be looking beyond standard super income streams to those that may be better suited to their goals.

A retirement income stream like an annuity can provide a guaranteed regular income for life no matter how long you live and how investment markets perform, and payments can be indexed to keep pace with inflation.

Ultimately, though, having the retirement you want is about planning early, and working out what's best for you.

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