Jeremy Duffield, Author at Retirement Essentials

Reducing retirement anxiety: Building financial confidence

Retirement can be filled with all sorts of new freedoms and experiences. However, this new phase is not without its anxieties. Research by UniSuper shows that over 90% of Australians have some concerns about retirement, and fewer than 10% feel their retirement is completely stress-free.

A significant source of this anxiety is financial uncertainty. Nearly half of all working Australians (45%) feel they are not financially prepared for retirement, and a similar number (48%) don’t know how much money they will need. A substantial 68% of Australians also worry about outliving their savings. This “fear of running out” can lead retirees to live and spend too cautiously, denying themselves the joys they worked so hard to achieve.

And the worries aren’t just about money. Many people are concerned about the non-financial aspects of retirement. The UniSuper survey found that 61% of working Australians worry about losing social ties from the workplace when they retire. Losing a sense of purpose and identity is also a key concern, which is why 81% of working Australians plan to continue working in some form, such as through a new job, volunteering, or hybrid work.

The financial anxieties often stem from the unasked and unanswered questions that can create significant stress. Questions such as “Do I have enough to retire?”, “How can I make my savings last?”, and “Will I qualify for the Age Pension?” can feel overwhelming. The good news is that these questions can be answered, and the fear can be replaced with clarity and confidence.

Consumer research shows that advice is the best antidote for retirement anxiety. The data shows a critical link between seeking advice and retirement confidence. Around two-thirds of working Australians (66%) who have received financial advice feel confident about how much money they will need in retirement. This is in stark contrast to the 77% of pre-retirees who have not sought professional help and don’t feel prepared. For those who have already retired, 71% of those who received advice felt confident about their next phase of life, and 68% knew how much money they needed for retirement.

This is where services like Retirement Essentials’ advice consultations can make a significant difference. By providing easy and affordable access to financial guidance, we help people put a plan in place to face retirement with confidence.

Is the Age Pension more valuable than you think?

by Jeremy Duffield | Centrelink Age Pension

What would you do if you won a lottery prize of $766,000? That’s a life-changing amount of money for most people. What if you found out you could be entitled to even more – over $1.1 million? The good news is you don’t need a winning ticket to receive that kind of financial boost. You could be entitled to that much if you receive a full Age Pension.

While the Age Pension may not feel like winning the lottery – because you receive it in a stream of fortnightly payments – for many Australians, its lifetime value is equivalent to a very high lottery payment. In fact, as the table below shows, the lifetime value of the Age Pension –calculated to age 92 – for a full single recipient is $766,100, and for a couple, it’s a staggering $1,155,600. This isn’t just a small supplement; it can represent a huge portion of a person’s total retirement income. For someone receiving the full Age Pension with $150,000 in assessable assets, Retirement Essentials estimates show this might represent 79% of lifetime retirement income.

When retirement finances feel like a Rubik’s Cube

by Jeremy Duffield | Retirement Advice

For many of us, the idea of retirement finances can feel as complex and frustrating as a Rubik’s Cube. It’s a puzzle with many different sides and components that you have to twist and turn until they all align. You’re trying to juggle your Age Pension, super, work income and any other investments you have, all while trying to answer big questions like “How much can I spend?” and “How long will my money last?”

The many facets of retirement

Just as a Rubik’s Cube has many facets, so too does retirement planning. Each side of the ‘retirement cube’ represents a crucial component, and they are all interconnected. The major ones include:

Superannuation: Your personal retirement savings.

The Age Pension: Government-provided support for eligible retirees.

Other investments: Any additional assets you’ve acquired.

Housing: Your living situation and its financial implications.

Retirement goals: What you hope to achieve and experience in retirement.

Life expectancy: How long you anticipate you will need your savings to last.

The goal is to find a solution that makes you feel comfortable and secure about your retirement future.

Common questions and concerns

Many people embarking on their retirement journey share similar concerns. They often ask:

How do all these different pieces, like my super and the Age Pension, fit together?

Will I be okay?

Retirement Essentials’ most recent work with clients with our Retirement Readiness tool has shown that the most common advice questions and needs are centered around:

Running out of money – no one wants to do that

Centrelink entitlements – getting them/getting the most from them

Starting an Account-Based Pension – how to convert your super into an income stream

Estate planning – often related to getting beneficiaries right

Setting retirement goals – working out whether you’re on track

Superannuation contributions – how to maximise your super

Nicole Bell, an adviser at Retirement Essentials, helped put the puzzle pieces together for Joseph and Robyn. In their late 60s, the couple had been retired for a few years and had never made any changes to their super as they weren’t sure how it might affect their Age Pension entitlements. They didn’t understand how all of the puzzle pieces of retirement could fit together, so they just hadn’t been able to take any action at all out of fear of doing the ‘wrong’ thing. They have been getting by making occasional withdrawals from their super as Joseph’s part Age Pension alone is not enough to meet their needs. They had heard of an Account-Based Pension, but worried if they were forced to take a regular income they would lose some Age Pension benefits.