OFFSHORE: Looming Retirement Scary For Many Australians
By: Nobby Kleinman
The future looks bleak for almost 50 percent of Australians looking to retire in the next five years.
Financial institution HSBC has just released a report ‘Future Of Retirement’ in which they have found 15 percent of the population will not be able to afford to retire and will have to keep working.
These numbers are in line with other similar studies which is a frightening prospect for many.
Not dissimilar to most western countries, it said 71 percent of those wishing to retire in the next 5 years had not saved enough money, while 28 percent still had a lot of debt. More than one in five had dependents who were reliant on their income. That in itself is a worrying statistic!
“Many dream of an early retirement, but the reality is that concerns about money prevent them from achieving their goal” said head of HSBC head of retail banking.
Market volatility created concerns for more than one-third of people who are fearful their financial situation could worsen and increase pressure around their money.
Knowing what the report had just identified, this comes from the same head of retail banking, “With the vast majority of superannuation funds linked to the stock market, the current volatility only increases the need for sound retirement planning.” But it was this comment that irked me, “Even small amounts saved now could make a difference in the future” he said.
This reminds me of a sales manager who once said, “you need to get every last dollar from your client’s pocket, because if you don’t, the banks will.”
That comment keeps coming back to haunt me whenever I read someone who is thinking more about profits rather than going to the clients and saying, let us give you totally unbiased advice.
They should be doing a proper financial plan and telling clients to eliminate debt well before they even consider contributing money they can ill afford to put away into a locked account like a retirement fund.
All the financial institutions care about is their profits and bonuses, instead of showing care for the clients. It’s just the normal diatribe rolling off the tongue about contributing early and at any amount as compound interest is — according to Albert Einstein — the eighth wonder of the world.
Although that may well be the case, it works just the same for debts, which also compound with interest payable. So when will the government crack down on the advice given in this manner which sees consumers reaching a stage in life when it is too late to turn back the clock to achieve financial independence, and become an eventual burden on the taxpayer.
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