For many years, I’ve seen first hand that there is a retirement crisis for the baby boomer generation!

The Australian Government also predicted this and had the foresight to mandate compulsory superannuation. However, the introduction of mandatory superannuation only occurred in 1994.

That means that only those under the age of 47-50 will have had superannuation for their entire working life.

There is still a significantly large proportion of the population that missed out, that may still have to rely on the safety net of the Government Age Pension or be prepared for a lifetime of work!

A large part of the financial problems that baby boomers face today is due to the fact that they have to fend for themselves when it comes to retirement.

I believe the Age Pension is a thing of the past.

In this day and age it is difficult for a couple to live off $37,908 per annum (as at Nov 2021).

The great tragedy is that while the rules of money were changed, education about money was not. A majority of baby boomers were raised to understand the old rules of money...

Go to a good school
Get a good job
Get a house
Repay your mortgage over the next 30-40 years
Then think about saving money for retirement

Unfortunately, those old rules of money don’t work in the new world of money

The new world is where you have to know how to invest in order to succeed.

The government have to be applauded for mandating superannuation for the next generations. That will mean every working Australian will have money invested for their future.

However, there needs to be more education, support and advice provided to those aged 50+

There are a plethora of strategies that those who are looking at retiring that they can consider:

Down-sizing
Many Australians have spent the past 30-40 years repaying their mortgage. For those over the age of 50, this may be their largest asset.
As you head into retirement, it may be time to rethink your housing needs for the next 20-30 years.
Do you need a 4 bedroom house with a pool?
Could you down-size and look to invest the proceeds - whether it is $200-500k that could generate an addition income of $20-50k p.a.
Superannuation
Despite not enjoying mandated superannuation for your entire working life, you may still have accumulated $100-500k.
Looking at your investment options and building your investment strategy for your next phase in life, constructed a portfolio with lower risk and higher yield, will support you in increasing your capital longevity.
Superannuation strategies
Whether you are self employed or an employee, there are a plethora of strategies that you can take advantage of to save addition money.
Superannuation is a brilliant tax vehicle to support you in saving more for your retirement.
Rather then paying tax at up to 47% you can effectively save 32% by contributing money to super (through concessional contributions/ salary sacrifice).
Which based on the concessional contribution cap of $25,000, the tax benefit equates to $8,000 per annum. If you are looking to retire in 5 years, this could equate to an additional $40,000 in retirement savings.
In addition, superannuation is the only tax environment where the tax rate is 0% in retirement.
That is 0% on income generated, 0% on capital gains crystallised.
This enables you to receive all the income, growth and franking credits to your benefit.
Inheritance
Those nearing retirement 60+ years of age, are seeing their parents reach their life expectancies. With many experiencing a loss of a parent(s) resulting in an inheritance. Coming into retirement, there are a plethora of ways to maximise this money to ensure it works for you and you don’t end up working for your money.
Investments
Many heading into retirement did not have superannuation throughout their working life, and have invested in property and shares. Understanding how this can be structured in the most tax effective manner can save you tens of thousands of dollars (especially when it comes to reducing potential capital gains tax).

The financial landscape is an absolute minefield.

Making mistakes so close to retirement or in retirement can be determinantal to when you finish work and your quality of life in retirement.

If this is not a field you are an expert in, it may be worth investing a small part of your retirement money into personalised professional advice.

It’s time to increase your financial literacy.

Are you prepared for a lifetime of work?