High hopes make retiring unaffordable

BABY Boomers are taking an active role to boost their retirement savings but fewer expect to be able to afford the lifestyle they want.

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High hopes make retiring unaffordable

BABY Boomers are taking an active role to boost their retirement savings but fewer expect to be able to afford the lifestyle they want.

The latest Commonwealth Bank Lifestyle Aspirations survey found 77 per cent of people aged 45-64 planned to make changes to save for retirement, such as visiting a financial planner or making extra superannuation contributions.

The majority of respondents expected to have a better lifestyle in retirement than their parents, but only 63 per cent think they will be able to afford their desired lifestyle - down from 68 per cent in 2006.

Commonwealth Financial Planning general manager Tim Gunning said most Baby Boomers had an optimistic outlook despite the uncertain economic environmnent.

"With expectations and aspirations high, many have reviewed their financial position and taken a more active role in their retirement planning,'' he said.

The survey also found:

*TWO-THIRDS of Boomers had not revised their super strategy since last year's law changes.

*INVESTMENT in shares and property had dropped to 39 per cent, from 56 per cent in 2006.

*MORE than half the respondents planned to continue working to supplement their retirement income.

"The old concept of a magical day when working life ceases and retirement begins appears to be outdated as people come to terms with their aspirations and their financial reality,'' Mr Gunning said.

Active planning tips

* Assess your financial situation - include income, outgoings and assets.

* Consolidate your super to maximise your investment.

* Determine your retirement age to work out how long you have left to save.

* Choose your desired retirement lifestyle, home and income.

* Seek advice from an accredited financial planner. Interview several to find out who will suit your needs best.

* Ask your planner to calculate how much you will need to save between now and retirement.

* Make additional contributions to your super fund if you can afford them.

Source: The Commonwealth Bank