Retirement Risks and YOU

What are the biggest financial risks to your Retirement?

Retirement – you have longed for it you have your retirement plan in place.  You are looking forward to the day that you no longer need to set the alarm clock. The day will be yours to do with as you wish! Maybe it will be gardening or having that leisurely cup of coffee.  Or maybe heading out to go fishing or play golf.  This is what you have waited for all your life!

Now it is your turn to get something back for all of those years of hard work and all that tax that you have paid. You have done your sums and yes, you will have a comfortable retirement.

However, what you had not counted on was:

  1. The government always moving the goal posts
  2. The continual changes to superannuation
  3. The Age Pension tightening of the asset and income test – the Age Pension legislation has been reworded and it is no longer a right but has now changed to a ‘safety net’
  4. What about the current low interest return environment – can you remember the day when you had to pay 17 to 18% on your mortgage (Term Deposits were paying up to 21%) Oh the good old days, but did you get the advantage of that, not really because you had a mortgage to pay

And let’s talk about the great ‘Australian Dream’. You were all told to aim for owning your own home, and yes this does put a roof over your head, but it does not provide you with an income in retirement. For most of you though it will be your largest asset.

Longevity Risk

But possibly your biggest financial risk and concern is going to be how long will you live for, and will your retirement funds last the distance?

One of the challenges that we face going forward is going to be our ageing population. There will be a dramatic increase in retirees, starting from now and retirement will last longer.
It is an interesting fact that when the Age Pension was introduced into legislation in 1908, that this payment was established to provide an income to Men over the age of 65.  And then later on Women over the age of 60. However back then only 4% of the population were over the age of 65 and men could expect to live to only age 55 and women to age 59.

The current life expectancy in Australia now is Age 83 for men and 87 for women and this continues to increase each year.

It is great news that you now have the benefit of a ‘Longevity Bonus’. But even though you may be living longer there is no guarantee of the quality of your life.

This could see you spending a 1/3 of your life not working.  You could be looking at and needing to plan for 30+ years in retirement. If you are a member of a couple then there is a high likelihood that one of you will live to Age 95.

Lower workforce

In 2020 there will be more 65 year olds than 1 year olds. We are effectively starting to bloom out at the top and we now have more Australian’s retiring from the workforce than there are entering it.

Our workforce is shrinking.  In 2002 there was 5 workers for every retiree, in 2015 this reduced to 4.5 workers for every retiree but the scary picture is that by 2054 there will be only 2.7 workers for every retiree.

So this raises the big question – how will the Government be able to continue to pay the Aged Pension in its current form with less workers to fund this payment. The answer is that they won’t, so it will be even more important for retirees to be self-funded.

Aged Care Risk

Another risk to your retirement might be ‘Aged Care’. You have planned prior to retirement on how to build your savings and your superannuation. You have planned your retirement and how much income and capital you will require. You have a will in place and have planned for your death. But what about the ‘in-between’. Have you planned for Aged Care and discussed what action you would take if this was to become a reality. The biggest issue is that a lot of retirees go directly from hospital to an aged care facility.  A decision normally must be made quite quickly to secure a place in the home. This can lead to poor financial decisions being made.

Whilst you are in good health is when the discussion around Aged Care should begin and it is very important to involve your family.

So what will be your biggest financial risk in retirement?

Will it be outliving your money? Will it be the low return on your retirement funds? Will it be the continual tightening of the Age Pension? Will it be having to move to Aged Care?

Whatever it is – We can Help!

But why would you seek advice? You are probably thinking what can a Financial Adviser offer me? Well the right kind of financial advice from Cooper Wealth Management can:

  • Set your financial goals and help you achieve them
  • Help you make the most of your money
  • Get you any government assistance you’re entitled to
  • Enable you to feel more in control of your finances and your life
  • Avoid expensive mistakes
  • Protect your assets
  • If Aged Care is on the horizon, provide you with options

And if you are not on track to achieving your goals we can help you put the right strategies in place or help you come up with more realistic goals.

We at Cooper Wealth Management do not charge a fee for you to come and have some initial discussions with us. This initial appointment is FREE and you are under no obligation to proceed any further. At this meeting we will outline how we can help you.

Need some further information?  We also regularly run FREE educational sessions on a range of topics at varying venues so make sure that you check out our events website which is This website lists all of our upcoming educational sessions.

Come and talk to us and let us get you on the road to Financial Freedom.

Book a chat.

Felicity Cooper

Owner and Financial Planner

As the owner of Hive Wealth, I focus on leading a team that helps you save money, spot opportunities, invest well and lower financial risk.

Your best choice of financial planners who grow your wealth and life by saving money, finding financial opportunities, investing smarter and lowering financial risk. We increase your wealth, and know your life is more than money. Based on the Gold Coast in Queensland Australia an increasingly serving clients nationally.

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