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4 practical tips to help you plan for your retirement

A smiling businessman using laptop indoor; image used for HSBC Australia 4 practical tips for your retirement plan.
Ageing populations, rising health costs, and long-term low interest rates on savings have raised concerns about how the government can support older generations. With this economic uncertainty, it has never been more important to save and prepare for the changing retirement landscape.

HSBC's Future of Retirement survey looked at how working-age people are planning for retirement. The results show the views of over 18,000 people in 16 countries, and reveal how political, social, economic and technological changes have influenced their spending, saving, and investment patterns.

The study uncovered four practical actions that may help you plan for a better retirement.

1. Be realistic about your retirement

Increased access to healthcare, rising standards of living, and technological advancements have meant life expectancies are increasing.

  • 64% of people think millennials will live much longer, which means they will need more to support themselves for longer
  • 75% are concerned rising medical costs will force retirees to spend more in retirement

For a longer, and perhaps, more expensive retirement you may have to start saving earlier, which might involve being more aggressive with your budget. It is important to plan for the increasing cost of healthcare in your budget.

2. Consider different sources of funding

'Lower for longer' interest rates means there is a higher opportunity cost of leaving money in savings.

  • 37% of people think low interest rates mean they will need to move their money from savings into investments
  • 47% think property offers the best returns for retirement saving

Consider adjusting your savings and investment portfolio to spread the risk and maximise your returns for retirement. Actively seek information to guide your financial decisions and be realistic about expected returns.

3. Plan for the unexpected

Economic volatility means it's more important than ever to prepare for unexpected events.

  • 51% of people say they will continue working to some extent in retirement
  • 28% would go back to work if their retirement income did not provide the standard of living they were used to

Unexpected expenses can have a major impact your lifestyle in retirement. You should consider worst case scenarios when deciding your budget and consider seeking financial advice to protect your retirement income.

4. Take advantage of technology

New technologies have made it easier to make informed decisions about retirement. Over a third of working age people agree that new technology makes it easier to budget for their retirement.

  • 13% of people have used an online retirement calculator
  • 7% have used a retirement planning app

The future of retirement is changing, and so are the strategies to prepare for it.

By using new technologies available, you could better navigate shifting retirement landscape to meet your future financial needs.

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Disclaimer

This article doesn't take into account your objectives, financial situation or needs. You should consult appropriate professionals or experts before making any financial decisions. This article's content or any copy of it cannot be altered in any way, transmitted, copied or distributed to any other party, without the prior written permission from HSBC. Issued by HSBC Bank Australia Limited ABN 48 006 434 162 AFSL 232595.

Reproduced with permission from The Future of Retirement Shifting sands, published in 2017 by HSBC Holdings plc.