THE SENIOR HAVING a clear financial plan could make the transition into retirement less stressful, with new research suggesting retirees who plan ahead feel more confident about their money.
Research from the US found 40 per cent of people surveyed experienced at least a moderate level of financial stress, but that figure fell to 29 per cent among those with a financial plan.
Cerulli Edge senior analyst John McKenna said retirement remained one of the biggest financial goals for clients and having a detailed plan could help reduce uncertainty.
“A detailed financial plan that is updated periodically can relieve financial stress, while helping advisors determine the best mix of investments and products to support clients’ retirement goals,” he said.
The findings come as Australians continue to grapple with the cost of living, uncertainty about how long their savings will last and increasingly complex decisions around superannuation, pensions and retirement income.
A recent survey of The Senior readers found most considered themselves relatively comfortable in retirement, although many were still watching their spending carefully.
Almost 70 per cent described themselves as content but mindful about spending, while 15.2 per cent said they were carefree and enjoying life.
Just over 10 per cent said they had become cautious and cut back on spending, while 4.3 per cent were concerned about running out of money.
The results reflected broader research from Challenger’s Institute for Lifetime Income, which found a retiree’s mindset could play a major role in how confident they felt about retirement.
Challenger spokesman Aaron Minney said uncertainty about the future could influence how retirees approached their finances and lifestyle.
“The inability to predict the future may see a pullback from content and carefree lifestyles in later years,” he said.
“More needs to be done to help older Australians visualise and plan for their future to ensure greater confidence, clarity and comfort at every stage of their hard-earned golden years.”
For people who cannot afford professional financial advice, there are also free resources available.
The Australian Government’s Moneysmart website provides independent information, calculators and tools covering retirement planning, superannuation and budgeting.
ASIC Commissioner Alan Kirkland has previously warned that retirement planning can feel complicated and overwhelming.
Experts say retirement planning does not necessarily mean predicting every expense decades in advance.
Instead, it can involve understanding expected income, superannuation, pension eligibility, regular expenses and how much flexibility exists for travel, health costs or unexpected bills.
Plans should be reviewed as circumstances change.
For older Australians approaching retirement, the message is relatively simple: knowing where your money is coming from, where it is going and what you want retirement to look like could provide benefits well beyond the bank balance.
A little planning may also buy something increasingly valuable in retirement – peace of mind.
