Is your behaviour holding you back?

Do these behaviours sound familiar?

• Overindulging on luxuries

• Bickering between the household

• Depression, stress, anxiety

• Sticking head in the sand/ lack of communication/ avoidance towards financial discussions

• Taking unnecessary risk with capital due to being unsure and not being able to see the light at the end of the tunnel.

A recent survey conducted by Newcastle Advisors have found that 75% of people heading into retirement experience at least one of these behaviours.

As you start to get closer to retirement, many people start looking at their superannuation funds to see how close they are and begin to wonder what in the heck has happened.

You may have got in the way and let this happen.

Of course life events can get in the way of your retirement savings, things like illness, divorce, kids, paying for kids weddings, not to mention repaying your mortgage on your home for the past 20-30 years, and a slew of other bills are a challenge enough.

However, our own human behaviour is a significant factor when it comes to your retirement savings and your financial position.

If your financial position is not at the point you expected, you may want to ask yourself if you are engaging in any of the previously mentioned behaviours. If you fix these habits, you have a higher probability of fixing your retirement problem.

Overspending or Overindulging on luxuries

Wondering what are the psychological reasons for overspending or overindulging on luxuries?

Overspending implies that living is more or beyond our needs. Basically, many of us have more debts than saving why?

Literally, it’s because of spending or overspending money.

When we always come to the moment of feeling down what we do is to buy ourselves some things that can make us feel better.

We see this all too often with those heading into retirement.

When you don’t have a clear plan, sometimes it seems that you cannot see the light at the end of the (retirement) tunnel.

Recently we had a new client explain to us why they purchased a $60,000 boat, when they had $300,000 mortgage debt at the age of 62.

They explained that they ran the numbers and they could not see a way they could retire. So if this was the case, they wanted to enjoy themselves today!

Bickering between the household, depression, stress and/or anxiety

The traditional wedding vows include a promise to be together

“for richer, for poorer”

but many couples find “for poorer” just too bloody hard.

Financial stress is the number one cause of relationship breakdown, according to Relationship Australia research.

Given this is the case, then it could be a rocky road ahead for many couples, given that financial stress is rising after the global pandemic and lock downs across the country.

It has been reported that one in three Australians were experiencing financial stress, affecting people at all income levels.

We have seen that people heading towards retirement without a clear plan tend to have a greater amount of bickering in their household.

A clear plan provides the peace of mind that you will be financially secure (and potentially financial free) and it ensures everyone is on the same page. A plan will alleviate the money stress from your relationship.

Sticking head in the sand/ lack of communication/ avoidance towards financial discussions

We call this the ‘ostrich effect’ where the decision to ignore dangerous or negative information by “burying” one’s head in the sand like an ostrich.

We also see this often with clients who are nearing retirement. Many people often “bury their head in the sand” to dodge facing their poor financial choices of the past. When they finally pull their head up, often they need expert advice & support to get them a solution to their problems they have been dodging.

In the case of retirement, when people pull their heads up, they realise their poor financial choices over the past 20-30 years has limited they choices in retirement.

A few years ago, we had a client in his mid- 50’s that had limited assets (no house, no car, with $300,000 in super), that had over $300,000 in unsecure debt.

After a divorce & poor financial decisions, they had managed to rack up an enormous debt with financial institutions and family members.

They had been “burying their head in the sand” until that family member passed away and the estate came knocking.

We were able to support the client with an actionable plan providing them with a solution that would not only get their hand out of the sand, but also be able to look to the future and start planning to be more financial responsible coming into retirement.

I will never forget that day, that the client said

“Matthew, thank you for your help.
Because of your advice & support, it feels like the noose that was hanging around my neck has been lifted. I feel free.”

Taking unnecessary risk with capital due to being unsure and not being able to see the light at the end of the tunnel.

While nothing in life is certain — well, except death and taxes — as you enter your retirement years, you’ll face more uncertainty than ever before.

While retirement’s a time to relax, before you get there you’ll face risks that could derail your plans.

What if you outlive your money? What if you come down with a debilitating, and expensive, illness? Will your income keep pace with inflation? Will you have enough to live the life you want? If you choose or need to work, will you physically be able to? What if taxes go up? What if Social Security goes down? Will you have enough to pay for a aged care home?

Unless you’re very rich, these risks could threaten a comfortable retirement and impact the amount of money you’ll need.

Many people think about these risks, believe they don’t have enough money, and look for get rich quick schemes as a solution.

Whether that is gambling, property spruikers, specky stocks or even crypto currency, people are taking unnecessary risk with their money as they cannot see the light at the end of the tunnel.

If you're looking at your financial situation heading into retirement and are wondering what in the heck happened or if you are experiencing one or many of these behaviours, please get in touch for support.

*100% of stats & surveys used in this article are made up.