Members Alliance Cites Recent Study, States that Most People are Too Under-saved to Retire at 55 in Today’s Economy

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Members Alliance explains a recent study which indicates that a lack of sufficient funds has caused the average age of retirement for those who have retired during the last five years to reach 61.4, and what prospective retirees can do about it.

Members Alliance

Members Alliance

Australians are finding it tougher and tougher to retire, but there is still plenty one can do to retire comfortably. The most important thing is to start thinking about the future right now. That includes finding a professional to handle your retirement.

Australian Research Council fellowship winner Dr Michael Rafferty, working out for the University of Sydney, has started work on a four-year study concerning retirement. For the beginning stages, Rafferty leans heavily on a recent report by the Australian Bureau of Statistics, which stated that the average age of retirement during the last five years is 61.4 years.

The study further states that 13% of those over 45 don’t believe that they will be able to retire at any age. This indicates what Rafferty calls “a significant social change inside a generation.” Rafferty said, “We were retiring earlier and earlier until about 10 years ago,” and further stated that people now see retirement as “something to worry about,” as opposed to when it was virtually guaranteed.

A generation ago, the life expectancy was closer to 75, and people only had to make their money last for twenty years at the most. Now, life expectancy has been extended to approximately 10 years, and 20% of Australians who are now 65 years old are expected to live until they are 97. Consequently, funds for retirement now have to last longer than they once did.

Another reason why it is more difficult to retire is that employees are now responsible for their own funds, and the risk of losing their investments falls solely on the individual instead of the company. Housing prices have also gone up, requiring people to pay for their houses longer.

There are many things a person can do to make sure they have enough money when they finally do decide to retire. One important strategy is to simply work a few years longer. It is currently estimated that for every extra year a person works, his or her retirement fund lasts three more. It works out that way because the person is not only contributing more money to their fund, but not drawing from it, either.

It is estimated that an individual retiree would need $850,000 in their fund at age 55 to produce $25,000 a year for the 30 years it would take to get to 85, while someone who retires at 65 would only need $555,000, or $295,000 less, to produce the same amount of income until reaching the age of 85.

The other important strategy that people should employ to ensure a comfortable retirement is to mitigate the risk by having a professional handle their money. The system is complicated, and the economy is fluid, causing unacceptable risks for those who aren’t having their funds professionally monitored.

According to David Domingo, CEO of leading financial services firm Members Alliance, “Australians are finding it tougher and tougher to retire, but there is still plenty one can do to retire comfortably. The most important thing is to start thinking about the future right now. That includes finding a professional to handle your retirement.”

Domingo continued, “Planning for retirement is too complicated for the average person. We spend most of our days here not only investing money for our clients, but helping them understand exactly where it is going and exactly what the risks are in any investment. A person trying to do it alone simply doesn’t have access to enough information to mitigate the risks involved.”

Members Alliance Australia is a leader in the financial services industry. Their services include financial planning and risk management, debt conversion and reduction, wealth creation, and providing clients with information necessary to retire to a comfortable lifestyle. They are experts at managing pension and retirement funds, while keeping clients on top of current trends that may affect their nest eggs.

For further information, please visit the Members Alliance company website: http://membersalliance.com.au/about-us/testimonials or call them for consultation at 1300 365 731.

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