4 surprises about planning for retirement income

Franklin Templeton’s 2019 Retirement Income Strategies and Expectations (RISE) Survey uncovered four findings that may surprise you.

  1. Retirement Expenses May Be Higher than Expected

Australians don’t seem to be under any illusions about the cost of retirement. Nearly 3 in 4 pre-retirees are concerned about rising expenses draining their retirement savings. Furthermore, 40% expect their expenses to increase in retirement – well above the 28% who expect them to decrease.

Unfortunately, the experience of retirees doesn’t provide any relief to these anxieties. Concern about rising expenses is even higher among the retiree population, while nearly half of retiree’s state that their expenses have increased since retirement.

Concern about rising expenses doesn’t fade after retirement


Higher expenses in retirement is more common than expected


Part of being confident in a retirement strategy is understanding what to expect and then planning for that reality. Consider how each type of expense may change over time – do they rise with inflation? Are they impacted by changes in the economy? By anticipating the types of expenses, you will likely face, you can plan for the appropriate income to meet those needs.


  1. Health- Related Concerns are Top of Mind Across All Ages

Planning for retirement isn’t just about saving money. It’s also about appreciating the reality of factors that can have a major impact on an individual’s ability to experience retirement success. Our survey indicated that people are acutely aware of the role health might play.


  1. Retiree’s Approach to Spending Their Nest Eggs Is Not Always Strategic

One may assume that once someone is living in retirement, they have a plan for how they will spend their nest egg throughout their retirement years. Our results highlight a different story. Over a third (34%) of retirees are winging it, stating they are ‘spending what they need and hoping it will last.’ And even more (36%) are trying to avoid dipping into their savings at all. When we took a closer look as to why, uncertainty emerged as a common theme – whether it’s not understanding how much they can sustainably spend, what future expenses will look like, or what their time horizon is.

  1. Professional Financial Advice is Critical in Planning Retirement Income

For most pre-retirees, planning for their retirement income is a daunting task. How much will they need? Where will it come from? What strategy is best suited to their situation? These are not always questions with simple answers.

While a range of resources exist to help plan for retirement income, individual advice from a licensed financial professional appears to be one of the most effective ones. One survey indicated that working with a financial adviser is strongly tied to better preparation, reduced stress and increased confidence around the transition to retirement.

Plan for Surprises

No matter what your stage of retirement. There may be surprises that can catch you off guard. Having enough confidence in your income sources when you stop working ultimately comes down to knowledge and planning. Work with a financial adviser to help create a custom, written plan to fit your retirement needs and prepare for the challenges.


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