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Date Published : Tuesday, January 22, 2008
Planning for retirement when you're in your 20s or 30s may sounds like a bizarre thing to do but, according to financial experts, many Australians cannot afford to live to 100 due to their financial situation.
Despite the returns on superannuation policies rapidly growing over the last 15 years, the average super account balance suggests many people leave it too late to plan for later life.
Recent figures from the Australian Taxation Office suggested that the average super fund contains approximately $74,700. However, further statistics show the average single retiree needs at least $14,000 per year to live, with a couple requiring at least $23,000 each year.
As a result, many Australians approaching retirement age are nervously looking at their finances to see if they can survive through their later years.
Goldsborough Financial Services senior adviser John Oliver told the Courier Mail: "Generally, people spend more than they expect to in retirement - they have to replace capital items, new cars, holidays, home improvements, and grandchildren come along. Very few people have enough to last until 100.''
Therefore, people in their 20s and 30s are being encouraged to save now. A work-related superannuation scheme tends to give a lot of financial help if stated early but, as was proved earlier, other options must be investigated to prepare for retirement.
Term deposit accounts, for example, give a low-risk solution for people with spare money for high-interest rewards. Interest rates on such accounts can be up to 6.9 per cent higher than standard accounts, but the rate fluctuates depending on the size of the deposit.
Starting early with retirement plans may seem like a drag, when that money could easily be spent on a beer or a week away. However, it will pay dividends in the long run.
Australian savings accounts compared and reviewed.
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