Are we doing enough to prepare for retirement?

Are individuals and governments doing enough to prepare people for retirement?

Baby boomers are ensuring that retirement in the 21st century is a vastly different proposition to the one it was for our parents and grandparents.

We are living longer, most of us have superannuation and many of us are working longer – sometimes just to stay socially connected.

Technology is changing the way we live and work, and campaigns against ageism are empowering older workers to continue working full-time, part-time or casually.

But … how many of us plan for retirement? And are governments keeping up with the changing face of retirement? 

The 2018 report, titled The New Social Contract: a blueprint for retirement in the 21st century, by the Aegon Centre for Longevity and Retirement, runs a critical eye over retirement worldwide through an annual survey.

The report surveyed 14,400 workers and 1600 retirees in 15 countries: Australia, Brazil, Canada, China, France, Germany, Hungary, India, Japan, the Netherlands, Poland, Spain, Turkey, the UK and the US. 

Aegon chief executive Alex Wynaendts says that in a world where responsibility for preparing for retirement is shifting from governments and employers to individuals, we need to ensure that there is universal access to enable people to save for retirement. 

“Financial institutions, community groups and other non-profit organisations need to work together to develop long-term saving products and services that encourage people to save when they can. By doing so, we will be able to serve otherwise vulnerable groups, such as those working on a freelance basis or taking time out of work to care for family and loved ones.” 

The report identified nine essential features of retirement in the 21st century:

1. Sustainable social security benefits that serve as a meaningful source of guaranteed retirement income and avoid risk of poverty among retirees.

2. Universal access to retirement savings arrangements for employed workers and alternative arrangements for the self-employed and those who are not employed due to parenting, caregiving or other responsibilities.

3. Automatic savings and other applications of behavioural economics that make it easier and more convenient for people to save and invest.

4. Guaranteed lifetime income solutions in addition to social security benefits. Education for individuals to strategically plan how to manage their savings, to know how to avoid running out of money, and to have knowledge of the options to help them do so. Governments, employers and others should increase awareness and encourage individuals to take advantage of opportunities to have a portion of their retirement savings distributed in the form of guaranteed income, such as an annuity.

5. Financial education and literacy so individuals understand basic concepts and retirement-related products and services. Individuals must be able to ask good questions and make informed decisions. Financial literacy must be integrated into educational curriculums so that young people learn the basics of budgeting, investing and managing their savings – skills that can serve them well for the rest of their lives.

6. Lifelong learning, longer working lives and flexible retirement to help people to stay economically active longer and transition into retirement on their own terms – with adequate financial protections if they are no longer able to work.

7. Accessible and affordable healthcare to promote healthy ageing. Governments play a vital role in sponsoring and/or overseeing healthcare systems. Employers should provide healthy work environments and consider offering workplace wellness programs.

8. A positive view of ageing that celebrates the value of older individuals and takes full advantage of the gift of longevity.

9. An age-friendly world in which people can “age in place” in their own homes and live in vibrant communities designed to promote vitality and economic growth for people of all ages.

Do you agree with those recommendations? Is Australia doing enough on all fronts? 



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    7th Feb 2019
    Of course Australia (Government) is not doing enough by these standards. It would cost a lot of money which the government does not have and takes responsibility for individuals to properly plan for their retirement including prioritising expenditure while they are working.
    7th Feb 2019
    Unfortunately, Alan, individuals can’t have a closed door back room where they can negotiate their own lifetime pensions and perks like pollies do.
    The Care Bear.
    8th Feb 2019
    No Triss, but they can take responsibility for their own financial future.
    8th Feb 2019
    They do, SFR, by demanding those who did are ripped off to give more to those who didn't!
    7th Feb 2019
    As with most (if not all) articles claiming to address retirement, the focus is exclusively on financial planning with no mention of lifestyle planning.
    Once the finances are in order and you leave a working life behind, the real, and arguably harder side of retirement, appears - how to replace all that work gave us on a platter, eg: structure, routine, engagement, comradery, predictability etc etc.
    It can be an exciting and challenging time as we seek new meaning and purpose. Once the big holiday is over, the roses all pruned, the enjoyment of golf and fishing and reading books exhausted - the real challenges begin.
    Retirement planning is not just about financial planning - it is more about reinvention of self and discovering meaningful, sustainable life long goals.
    East of Toowoomba
    7th Feb 2019
    Stekmer you've hit the nail on the head, as far as I am concerned. Almost a year retired and I have weeks where there is no motivation to do anything either meaningful, or fun.

    As I have plenty of energy and would like to be with other people and feel like I am doing something worthwhile on a regular basis, I am probably going to do some volunteer work. The trick will be finding a volunteer role that isn't like "work". The things I miss least about "work" is the stress, the boss and the alarm clock.
    8th Feb 2019
    I feel for you East of Toowoomba. I struggled for a short time after being forced into early retirement to be a carer, but I quickly reinvented myself and now I'm busier than ever and loving life. The weeks are too short!
    The wolf
    7th Feb 2019
    The most important aspect of retirement is beside having a decent income is how to deal with boredom, the rest is cream on the cake.
    Old Geezer
    7th Feb 2019
    Income or boredom are not an issue to me except I'd like a bit of boredom as I seem to be always busy.
    7th Feb 2019
    Boredom could never be an issue for me. Shorten will make sure that income is a major issue, and make me regret working and paying taxes for decades.
    7th Feb 2019
    myself I have started playing tennis a couple of mornings a week, I am now looking at mens sheds,general diy around the house there would be no reason for me to get bored, lazy yes
    Lark Force
    7th Feb 2019
    Money and Health issues should be taught at school. When you start work that's when you start preparing for retirement. A retirement budget, along with housing, family matters etc is a must. Don't smoke, that impacts your health and budget. Shop for "specials' Don't gamble, buy as much Super as you can safely afford. Follow these ideas and a good lifestyle in retirement is possible. Worked for me. (But its hard to put an old head on young shoulders when they want it all NOW.)
    7th Feb 2019
    No, don't buy as much super as you can safely afford. Make sure that unless you can be very, very rich you don't save enough to put you above the OAP threshold. Doing so leaves you worse off than if you had saved less, and makes you the target of Shorten's filthy unfairness.
    8th Feb 2019
    I was shocked to be in a queue behind a smoker when the packet cost $27. The sales assistant said some brands are as much as $37. No wonder smokers are living in poverty and can't afford rent or bills.

    I wonder about buying extra super too. Might be better to buy into funds outside super where it's cheaper and has far less sovereign risk involved or just put cash into storage so you can get the pension and concessions.

    Not getting concessions is a real disadvantage. Especially if you develop health issues and the gaps run into big money.

    I heard a retired accountant had to spend down to get the part pension because medicines got up to $5000 a year and he couldn't afford that. With the pension he received discounted script costs of under $10 instead of tens of dollars each script.

    Which Government did away with the medical safety net?
    8th Feb 2019
    Yes, Rae, health is a major concern for the self-funded, and then there are all the other concessions and benefits pensioners enjoy!

    I don't think part-pensioners realize just how well off they are in comparison to those SFRs who are not much above the asset limit. Bottom line: the assets test is WRONG. Nobody should be punished for having saved and acquired assets, and in any case it doesn't evaluate assets accurately and it doesn't take into consideration special needs or longevity. A 95-year-old with $600,000 is a hell of a lot richer than a 67-year-old couple with $900,000, but they are both treated the same!

    I get really sick of ''spend your savings" BS. Why do they think people went without to save, if not to preserve those savings for future needs? I doubt any of us saved for the specific purpose of saving the government money to give to people who didn't go without nearly as much. And these wild assumptions that people with savings must have been 'lucky' or 'enjoyed high income' disgust me. Some may have, but many were just very hard working and very frugal. The problem is that spendthrifts rarely recognize that they manage money poorly. It's far more comfortable to make invalid assumptions about others and claim 'disadvantage'. Of course some were - but hundreds of thousands of pensioners were not. They made spending and lifestyle choices, and good for them. They had every right to. But why do they then assume that saving is not an acceptable choice and savers should be punished?
    8th Feb 2019
    Wow you sound just like me Lark Force, I did all those things except I don't drink either.
    7th Feb 2019
    Having family is the best asset in retirement. Grandchildren are especially wonderful and a great blessing.
    Keeping the mind active and being grateful and not whinging is important too.
    Men’s shed is good for some or keeping uphome maintenance.
    Gardening is good for some as well.
    Mentally ... playing games online or board games. Our family does both.
    You don’t need to spend money to have fun.
    Keep enjoying life and be thankful for each day.
    7th Feb 2019
    Are we doing enough to prepare for retirement? Maybe. However, we have Govts who make sure your retirement planning is destroyed - most recently, Libs with their changes to Assets Test, prior to that Labor changing OAP age to 67, and you can bet more attacks are coming such as Labor's attacks on FC refunds (saying Vote against us if you wish! Do it, people!), etc, etc.

    Retirees (3 Million+) do have a choice now - get rid of MPs of both these sick parties (and Greens) by putting them LAST in voting preferences. Retirees need to exercise their voting power as a group unless they want to continue to be ruined by these major parties whose MPs are leeches working only for themselves not for us.
    8th Feb 2019
    We could just stop spending any discretionary money and wait for the screaming to begin. The BCA would soon be demanding the Government fix it. Three million wallets slammed shut would just about stuff this economy right up. This current taking some from us here and some from us there is too slow in killing the economy as far as I'm concerned. We could just get it over quickly.
    8th Feb 2019
    Yep labor is going to ruin the retirement plans of hundreds of thousands
    8th Feb 2019
    Worse than that I think, Lothario. I don't think socialist fools realize just how much harm Labor's nonsense will do. They have this rosy image of everything being fixed by taking from those they THINK are 'haves' (and many are actually not at all!) and giving to those who either are, or pretend to be 'have nots'. They don't seem to get that whatever is given has to be first taken from someone, and there's a limit to how much you can get away with taking. I think Labor is pushing it too far, personally. And what really irks me is their lazy and sloppy attitude. The pension system needs reform. Superannuation system needs reform. It's just pathetically lazy and sloppy to jump on one perceived problem (which they can't even define correctly, as they ignore the fact that it's been partially resolved already!) and stuff things up further with a stupid ill-conceived reversal of a past reform that will clearly do more harm than good given their approach.

    2.6 million workers don't even know Labor is threatening their retirement plans. And pensioners are gullible and short-sighted enough to THINK an exemption saves them, but they don't think past the immediate and look at the flow-on effects.

    I am 100% in favour of budget savings and more money directed at education and health (if spent wisely - and sadly most of it isn't!), but tax and welfare policy needs to be responsible and FAIR.
    7th Feb 2019
    *Financial knowledge should be taught in school .
    *Individuals need to be responsible for their financial journey and be protected by the corruption of the banks and wealth managers etc by government rules
    *Most financial advisors and complex superannuation structures due to charges and bad decisions underperform public index funds.. broker fee only !
    *Governments needs to offer simple superannuation options .. drip drip drip
    * Majority people are lazy and want someone else to make decisions on their financial future
    and do not prioritise managing their expenditure buckets whilst working.

    8th Feb 2019
    If you have a healthy body and healthy finances, retirement is simply awesome
    8th Jul 2019
    Why do you all blame the goverments . Look at your self first and work the system .