It has been said time and again, that too many Australians are not ready for retirement, but it isn’t necessarily just financial unpreparedness that is concerning one financial planner.
Paul Benson, principal financial planner at Guidance Financial Services, says that people are being forced into retirement by society, and often end up bored and unhappy. He has started to question whether Australians have got this retirement idea completely wrong.
“Too often I’m coming across people who are retiring, not because they can no longer work, and not because they no longer wish to work, but because they feel that they should retire,” says Benson.
“Usually it’s that they hit 65, and either there’s a feeling that it’s time to get out of the way and let the younger ones have their shot, or that they’re entitled to an age pension, and so they would be ‘crazy’ to work on and in effect pass up their ‘entitlement’."
Because people are doing less manual labour, it’s not as necessary for everyone to retire so young due to their bodies being worn out, says Benson.
When the pension age was originally set at 65, life expectancy for males was 67, so the pension was only intended to support those at the very end of their life. Nowadays, a 65-year-old male is expected to live until 83 on average and a female to almost 87, and every time these figures are revised, the numbers go up.
Guidance Financial Services recently surveyed their clients about retirement. When asked “Why do you expect that you will retire?” 55% of respondents selected “to enable me to do the things I can’t do whilst still working, such as extended travel”. When asked how they expect to fill their time in retirement, 91% nominated hobbies and 83% travel.
Benson questions this way of thinking, asking why Australians put these things off until retirement when they run the risk of health issues. He suggests that once the mortgage is paid off and the children leave, people can cut down their hours of work to fit in their hobbies.
He says that the expectation (for males at least) to work 40 plus hours a week until 65, then cease work altogether and enjoy caravanning and playing golf until health issues kick in, “is dumb!”.
“Our thinking on retirement is outdated. If you are fit and healthy and want to continue in the work force, then you should be able to do so no matter what your age.”