Our super funds won’t help us with retirement, so it’s time to take control

Planning for your golden years can be thrilling, but the retirement landscape is changing quickly, and not everyone is keeping up. As more Baby Boomers approach retirement, there is a growing concern that super funds aren’t doing enough to guide Australia’s retiring generation through this exciting but overwhelming phase of life.

Regulators have this week called for urgent action after a scathing review by the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority, which assessed how super funds are implementing the retirement income covenant. This covenant, set up in 2022, requires superannuation funds to assist members who are close to retiring or have already stopped working to improve their retirements.

The report highlights that many Australians are unnecessarily holding back spending on their retirements, potentially leading to a lower living standard than what could be achieved with proper financial planning. It says the Australian community needs better assistance in using their superannuation savings effectively to create a good life in retirement.

APRA deputy chair Margaret Cole emphasises the importance of super funds providing assistance to their members as they plan for a sound financial future. If you’re approaching retirement yourself, you understand how challenging it can be to navigate the complex financial information in both pre- and post-retirement phases.

Unfortunately, many people at this stage of life are unaware that superannuation funds are mandated to help their members achieve good retirement outcomes, which means they might not even realise they are missing out.

So, where does that leave you? If you’re feeling overwhelmed and unsure of where to start, fear not! Let’s tackle this together and kickstart your retirement planning process while also demanding more support from the super fund sector. Here are seven steps to get you started:

• Understand your life expectancy: Knowing how long you might live during retirement is crucial for planning. Consider that men who are 65 today are expected to live to 85, and women to 88, meaning you may need to plan for at least 20 years of retirement or perhaps 30 or more if you take good care of your health or want to retire early.
• Dream big, build a vision: Retirement is about more than just finances – it’s about fulfilling your dreams. Picture your ideal retirement and the adventures, joy, and quality time spent with loved ones. Write it down. Make a plan. The government wants your super funds to help you turn these plans into action.
• Crunch your retirement numbers yourself: Start developing a comprehensive budget for saving during retirement and another for living in retirement. Include all living costs, one-off expenses, and lifestyle goals. There’s a free template available on my website to help you with this.
• Get yourself a financial plan and guidance: While assessing your financial situation is essential, seeking assistance from a financial adviser can provide you with the confidence to make informed decisions about your retirement. You want to avoid underspending and live a lower quality of life than you should. Can’t find an adviser? Your super fund could help here too.
• Remember your health is the real wealth of your retirement years: Prioritise your health and wellbeing, and spend on it if you can, as it is vital to enjoying your retirement fully. Regular exercise, a balanced diet, and preventive health check-ups should be part of your retirement plan. A healthy retiree is a happy one.
• Get on with finding happiness and fulfilment in retirement: With these steps in place, you can look toward your retirement with financial confidence, knowing how much income you can generate and afford to spend each year. Then identify and pursue activities that bring joy and purpose to your life during this exciting journey of self-discovery.
• Hit the road with confidence: For many Boomers, retirement is a chance to explore the world or our country. With confidence in your superannuation income you might be able to spend more on travel in the first few years, when you’re more active and adventurous. To get there you’ll need a bucket list and a good understanding of your travel budget to do so. Then, the world really can be your oyster.

While retirement planning can be overwhelming, and the lack of guidance from super funds presents an additional challenge, it doesn’t have to hold you back. It’s important that the retiring generation calls for the support and guidance it deserves, and if it doesn’t come, let’s seek out the answers ourselves.