Whether we are employed or business building or both, we all face the same problem. That is, how to finance that period of our lives from so-called ‘retirement age’ to the day we die.
For many, superannuation will only be part of the story. For the majority of Australians approaching retirement age, work super will not be sufficient regardless of whether it is in an industry fund or a retail master trust. Most who struggle with low super balances now would have still faced the same problem, albeit not so severe, even if the GFC hadn’t occurred.
Let’s face it! The period of time in retirement these days could be 30 years or so. Even a seemingly healthy $500,000 in superannuation is not likely to cut it over that time span.
We all need to accumulate enough income earning assets to see us through to the end of life. That requires a pro-active approach to wealth building with sufficient lead time. The alternative is to rely on work super and the age pension and hope for the best.
Those unable to be fully self funded retirees or who find the age pension inadequate, may have to keep working in some capacity, even on a part time basis to accommodate traditional retirement activities, such as travel and sightseeing.
Business owners might choose not to sell out so soon and stay longer in their businesses, perhaps decreasing their direct involvement. Others might choose a sea-change, living and working in a different location, or a career change which could include running a home-based business, online or offline.
The point is that whatever the post-retirement strategy is, it has to be planned. If a new career or business building are to be part of the retirement solution, common sense suggests that they should be planned and in place before existing income sources are terminated.