The spike in the cost of living over the past couple of years continues to have far-reaching effects. The latest is revealed in a report that pinpoints it as a factor in delaying retirement.
The report, commissioned by Equip Super, reveals that only 26 per cent of Australians plan to retire by the age of 65, with many of those citing financial pressure as the reason for the delay.
Equip Super head of advice Paul Stocker said the results reflected a general rise in financial anxiety. “Coping with the escalating cost of living is a shared concern for many Australians.”
Delaying retirement – by the numbers
The survey questioned more than 2000 Australians, selected at random across the country. In a media release outlining the research findings, Equip Super highlighted financial pressures as a driving force in delaying retirement.
“The results illustrate the financial pressures being felt by many households across the country,” the statement said. These being “rising inflation, interest rates and higher costs of living”.
Australians delaying retirement are doing so by an average of six years, the survey results revealed. So if your plans have you retiring in your 70s, you are by no means alone.
Of those delaying retirement, 39 per cent cited the rising cost of living as the reason for the delay. The report also noted that cost of living had modified the spending habits of most respondents. The vast majority – 85 per cent – said they had adopted a more cautious approach to spending.
A ‘gradual retirement’ case study
While the phrase ‘delaying retirement’ could be inferred as maintaining existing working arrangements for longer, alternative approaches are possible. Equip Super highlighted the case of 70-year-old Sydney resident Diane Benham.
“I started working at 15, and now at 70, I am still working 20 hours a week,” Ms Benham said. “While our financial situation is generally stable, there are things we’d like to do when we retire, like travel.”
Ms Denham indicated that the current cost-of-living spike had forced her to rethink her plans. “Delaying retirement wasn’t always part of my plan,” she said. “But with expenses rising, it’s slightly worrying to think about life without an income. We just don’t know what’s around the corner.”
Ms Denham’s experience reinforced the fact that even Australians with a sound financial base have had to consider delaying retirement. “Although we’re fortunate to own our home, there are ongoing maintenance costs,” Ms Denham said. “Everything from shopping to car expenses keeps increasing. Every time you go to the shops it seems to cost more money.”
Taking a pragmatic approach, Ms Denham has continued working part time to ensure her ‘full’ retirement is adequately funded. “When I finally decide to retire,” she said, “it is essential that my superannuation provides me with a secure future, but also allows us to enjoy it.”
Delaying retirement and other strategies
Depending on where you are in your working career, delaying retirement may be the best move. If your work brings you ongoing fulfilment, that’s not necessarily a bad thing. But if you’d rather retire sooner than later, planning is important.
Paul Stocker emphasised this. He said anxiety about retirement savings was natural in challenging economic times. However, he urged individuals to seek expert advice to plan for a successful next chapter of their lives. “If people take the right steps today, they should not have to work longer than they want to,” he said.
Mr Stocker said Equip Super members had access to free general super advice at no additional cost as part of their membership. Members also have access to financial planners to design a more comprehensive financial plan.
While Mr Stocker’s advice naturally focuses on Equip Super, it holds true for superannuation and super funds in general. A chat with a registered financial adviser could help ease cost-of-living anxiety. It might even change your mind about delaying retirement.
Are you considering delaying retirement? Is cost of living a factor in that decision? Let us know via the comments section below.
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Andrew Gigaczhttps://www.patreon.com/AndrewGigacz
Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.
