In today’s society, old age usually means retirement. For some, this may be a welcome period of life, the opportunity to slow down and smell the roses. However, for those who defined themselves by their jobs, retirement is something to dread along with the loss of identity.

Another common fear is the thought that financially they have not accumulated the funds to maintain their current or even a dignified, standard of living. It is an unfortunate fact that many people in retirement live lives of economic desperation. One of the most depressing aspects of old age is that economic factors often cause the elderly to see themselves as worthless and insignificant. Feelings of failure are common amongst older people forced to downsize their residences or move to cheaper housing areas to offset a lack of savings. People who were once proud of their financial independence often find themselves dependant on the government for survival. Their grown children, with their own families to care for, have little surplus to maintain elderly parents in the manner to which they had become accustomed. For this reason, elderly people often see themselves as burdens to both family and society and simply wait for death. In a society that puts a high premium on success, it is understandable that these people see themselves as failures. They live out the remainder of their lives feeling that they have come to nothing.

The first old age pension payments were introduced by the Australian Federal Government circa 1910. The eligibility for males was 65 and for females 60. At that time, the life expectancy of Australians was approximately 57 and 61 respectively. Obviously, the government felt its commitment would not be too large a burden on its available funds! Today, however, life expectancies are dramatically higher: 80 for males and 83 for females. Although people are living much longer now than when the old age pension was first introduced, they are not necessarily in the best of health. The difficulty with this is that whilst medical science may be prolonging lives, it does not pay the bills.So what are the financial options available to people in order to enjoy a dignified standard of living at retirement? The least attractive option is the old age pension which is generally regarded as being calculated to only  provide subsistence living. In addition, pensioners would at least need to own their homes and have no other financial commitments at the time of taking on the pension. And when elderly people can no longer look after themselves, their only alternative, generally speaking, is a nursing home. 

Unfortunately, many people forced to live in nursing homes because of financial or medical reasons find themselves stripped of their dignity, wondering why death doesn’t come sooner. If people want to enjoy a reasonable standard of living at retirement, where they can be financially independent irrespective of their health situation, then the obvious solution is to start financial planning at an early age. When is an early age? Obviously, the longer funds are accumulating for retirement, the greater the end benefit. Therefore, the starting point for accumulating retirement funds would differ for each individual. The point is making the decision to start and then maintaining a regular focus on that particular strategy. Discipline is the key to retiring a happy and financially secure person.

Russell Collins is a Registered Life Broker and his firm, Russell Collins & Associates Pty Ltd, is a Member Firm of the Associated Planners Financial Services Group. He joined the life insurance industry in 1971 following a 15 year stint in the NSW Public Service and is in the top 6% of life insurance producers worldwide. Russell has run Business Insurance workshops/seminars for a number of Australian life insurance companies and Producer Groups and has also produced his own video series on the Business Insurance and Estate Planning markets. Russell works from his own office in Belrose, in a partnership with his son Matthew who joined the Practice in 1998. Russell is married with four children, and five grandchildren. In September he and his wife Jacqui will celebrate their 39th wedding anniversary.

By Russell Collins