The Five Most Common Mistakes Australians Make When Planning For Retirement

(MENAFN- Market Press Release) September 4, 2025 6:00 am - If you want a truly worry-free retirement, the first thing to do is prepare now and make sure you don't commit the five common mistakes outlined here.

Retirement is often imagined as a reward for decades of hard work, a time to enjoy freedom on some remote beach far from civilisation. Yet for many Australians, this image doesn't align with reality.

Research consistently shows that a significant number of retirees find themselves underprepared and worried about how they would maintain their desired lifestyle or even their basic necessities. So where do things start to go wrong? Outside factors one can't control like the economy, the answer lies in a handful of recurring mistakes that derail even the best intentions.

One of Perth's leading financial advisory firms> was gracious enough to jot down the five most common missteps Australians make when planning for retirement. Have you committed any of these? Well, here's your chance to course correct.

1. Underestimating How Much Money They'll Need
A common assumption is that expenses will drop dramatically in retirement. While certain costs decline, others, such as healthcare, travel and home maintenance, often go up.

To compensate, financial planners suggest retirees need roughly 60 to 70 per cent of their pre-retirement income to sustain their lifestyle. Falling short of this target can force compromises that undermine quality of life.

2. Relying Too Heavily on the Age Pension
The Age Pension provides a safety net, not a comprehensive solution. Yet many Australians plan as though it will cover all their needs.

The reality is that government benefits are designed to provide basic support, not fund a comfortable retirement. Treating the Age Pension as a primary income source can leave retirees exposed to inflation, policy changes and unexpected expenses.

3. Ignoring the Impact of Inflation
Inflation erodes purchasing power over time, and its effect becomes more pronounced over a 20 to 30-year retirement horizon. A dollar saved today will not buy the same goods or services in two decades, and many pre-retirees neglect to account for this when calculating future needs, leading to significant shortfalls later in life.

4. Failing to Consolidate Superannuation Accounts
Australians who have worked multiple jobs often accumulate several superannuation accounts. Left unmanaged, these accounts can generate duplicate fees and insurance premiums that eat into savings.

Consolidating super into a single fund can eliminate unnecessary costs, yet many fail to take this simple step, costing them thousands over the years.

5. Delaying the Planning Process
Perhaps the most costly mistake is procrastination. Retirement may feel distant in your 30s or 40s, but time is a critical factor in wealth accumulation.

The longer contributions remain invested, the greater the compounding effect. Waiting until your 50s to begin serious planning dramatically limits your options and requires far higher contributions to achieve the same result.

The Mistake of Not Getting Expert Help
Avoiding these mistakes demands a deliberate strategy. Building a retirement plan early and revisiting it regularly can help ensure a secure future, but for those unsure where to start, consulting a qualified retirement planner is often the most practical approach.

Well, maybe that's another mistake a pre-retiree should avoid: not having a professional help set realistic targets, optimise superannuation and implement strategies to ensure sufficient income once work stops completely.

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