Boomers could teach Gen Y a lesson
LAST Wednesday, Smart Investing looked at the struggle of Generation Y to kick-start their savings.
Those who entered the workforce in the past decade or so – in other words, Generation Y – need look no further than many of the baby boomers who are in their final years before retirement or in early retirement for telling illustrations of the need to save.
Sadly, the savings of numerous baby boomers are inadequate to provide a reasonable standard of living in retirement.
The Australian Securities and Investments Commission (ASIC) has an excellent, straight-to-the-point feature on its website for baby boomers who intend to retire soon.
ASIC’s tips do not contain any surprises. These are just common sense measures that many near-retirees would no doubt neglect.
Here are a few of the tips:
* Try to boost super savings during whatever time is left in the workforce.
* Prepare a retirement budget before retiring.
* Begin comparing retirement-income products. And think about what diversification of assets would be most-appropriate for you, given your personal circumstances – including needs and tolerance to risk.
* Consider obtaining quality financial planning advice. This can be a time when expert advice is particularly vital.
Other practical tips from ASIC include: find out about any social security entitlements, watch for scams – particularly targeting retirees, and understand the implications of reverse mortgages (financial products that enable retirees to drawdown on equity in their homes).
Much of the debate about super to date, understandably, has tended to focus on the accumulation of retirement savings. Yet with the rapid ageing of the population, post-retirement concerns are increasingly gaining prominence.
Robin Bowerman, Vanguard Investments Australia's Head of Retail, has more than two decades of experience in the finance industry as a writer, commentator and editor.