There's nothing retiring about most people's retirement
Geoff changed jobs at the end of the last financial year. "It made it easier to do my tax," he wryly admits. At 53, the former partner of a thriving legal practice only works four full days now (instead of six) in his business consultancy role. And loves it. Retirement (Geoff hates the word) is the last thing on his mind. "I haven't had time to give it that much thought," concedes the father of two with a golf handicap of nine.
What word would you substitute for retirement? "I'm 53 and fully engaged," he boasts.
His is an attitude not uncommon among many professional people of a similar age. Being time poor but asset rich means he and his wife have not seriously considered the long-term nature of a specific retirement plan. Apart from not having that much excess income to invest anyway - most of his earnings were either poured back into the business or supported a family and mortgage - Geoff and his wife have too much living to do to contemplate 'retirement'.
John Brady, principal of Horwath Financial Services recognises such sentiments, saying that even at 50, "retirement may be 15 years away". So the issue is not necessarily retirement per se, he says, "it's a lifestyle issue about now".
It's also a lifestyle about choice. "One of the things that gives us choice," says John, "is financial freedom". He admits that while such liberty won't necessarily bring happiness, it can, as one of his clients once remarked, "let me drive around in a nice car looking for it".
A remarkable set of figures
We're living longer. An ageing population, advances in health care and trends in voluntary redundancy, means many Australians can today expect to spend about 20 years or more in retirement: 50 years ago the figure was two.
Think about that. Not so long ago, the average male's superannuation lump sum only had to last about two years. Now it needs to sustain a lifestyle for at least two decades. This paradigm shift in the cultural and economic landscapes has changed forever the way we think about and manage our money.
It's never too late to start
But the earlier the better, advises Kate Deering, Zurich's Senior Product Manager - Investments. "Long-term compound returns over, say, 20 years can be huge, so it is critical to start as early as possible," says Kate. While tax structures and actual investment options impact considerably on any outcome, the decisive element is disciplined and sustained saving. "Even a small amount up front, added to regularly, can make a major difference later in life".
As Kate says, retirement is a destination. And as with any destination, you must undertake a journey: a journey that requires careful and committed design. So, to get the most from this destination (and remember you might be there for up to 30 years), start planning as soon as you can. Because there's nothing retiring about most people's retirement. Just ask Geoff.
For more information, please contact your financial adviser.
Zurich can assist you with contacting a financial adviser.