Avoiding the pitfalls of retirement plans

Macquarie Uni retirement study helping Australians avoid common mistakes


Landmark holistic retirement study helping Australians avoid common mistakes


Macquarie University, in collaboration with Allianz Retire+, is seeking Australian-based participants for a landmark holistic retirement planning project.

The Australian Research Council linkage project team wants to test whether the provision of a complete retirement planning model offering career, health and financial guidance will result in better retirement outcomes for Australians.

Having completed a pilot of the holistic advice model in 2021 successfully, Professor Joanne Earl and the project team from Macquarie, UNSW, UWA and Allianz Retire+ now seek interest from Australian workers aged 50 years and over, to participate in the main national study.

Participants who complete the entire study can access a variety of online module learning, a free health assessment, one-to-one advice, and financial incentives for their time participating.

Prof Earl said: "Retirement can be a tricky business. How and when you leave work matters: if you retire too young, you run the risk of running out of money or getting bored. Others wait too long and might miss the opportunity to do things put on the back burner."

In researching the area of retirement planning for over 15 years, Prof Earl noted five common pitfalls that people often overlook when they approach retirement:

1.Not understanding how much money you'll need. When you look to the Australian Bureau of Statistics (ABS) 'Retirement Intentions' data, you will see that 46 per cent of people leave work because they have reached retirement age or are eligible for super. There are very few occupations in Australia that have a "retirement age". Even those that did are ever decreasing - largely as a result of legal action by employees. But what does reaching retirement age mean? The answer is likely heterogeneous - dependent on individual circumstances that should be considered ahead of time.

2.Thinking you will be living off your superannuation. Many people enter Retirement aiming for self-sufficiency, but the reality is that most Australians rely on at least some government pension as a source of income. Making sure you have enough to live comfortably, have realistic expectations about lifestyle changes - and assessing and understanding your entitlements - is key to avoiding looking back without regret.

3. Not having a plan in case you need to leave your current workplace. Looking to the ABS retirement intentions data, the average age of Retirement is not 65 or 67 as most would imagine. It's 59.5 years for males and 52.1 for females. With 11 per cent citing retrenchment, there is a case for considering whether you will need extra training or new networks ahead of time to pivot your career. Perhaps even plan to test if a side-hustle could become the main game?

4. Focusing on wealth alone. Money is an important ingredient in retirement - but it's not everything. It is a good predictor of how well someone adjusts to retirement as it provides a sense of security and enables people to do the things they want. However, ABS data tells us that 21 per cent of people retire due to ill-health. When and how people leave work predicts how well they adjust to retirement. It makes sense to consider potential lifestyle changes that contribute to positive health management to stay as long as you want and optimize retirement adjustment.

5.Considering when to retire. Some people may wish to never retire. But with the potential to be forced into retirement (from health or other reasons), it pays to take stock of a few questions to assess possible retirement age: What are you taking into consideration? How much do you love your job? Are you continuing to learn? What are your family's plans? Do you have enough money to live comfortably? Are you seeking more freedom? From what? Will your health go the distance?

"These are the common mistakes we see repeated when people approach retirement, and this study will seek to address many of these factors," Prof Earl said.

"By offering people a range of resources including career, health and financial planning advice, we will be able to better understand the impact of a more considered and complete holistic planning process on their retirement outcome."

Allianz Retire+ Chief Product Officer Simon Aboud said: "We are thrilled to support a study that acknowledges the positive impact advice has on retirement and we thank the renowned Project Investigators across Macquarie University, UNSW, and the University of Western Australia for their specialist input and collaborative design into such a landmark retirement study.

"This has the potential to significantly benefit Australians, ultimately leading to greater satisfaction and well-being in retirement. The project also has clear social, economic and health benefits for individuals and the greater community."