If you have staff who are heading towards retirement, you could find yourself in the position of being asked for advice. This is a common issue faced by many managers and HR personnel and one which needs to be handled delicately. Compulsory retirement is unlawful in all Australian states and territories including Tasmania.
Compulsory retirement includes when an employer persuades an employee to retire. So although you might think it’s in an individual’s best interests to retire, it’s important to ensure individual employees make their own decisions. What you can do is gain an understanding of why they’re considering retiring, or cutting back their hours, and offer some options such as flexible working arrangements.
Older employees nearing retirement can be scared by what their life might look like when they’re not coming into the office every day, so working part-days or cutting down to a few days each week might allow them to get a taste of what retirement might be like. While money isn’t everything when it comes to retirement, it is obviously important. One of the most common questions people have about retirement is ‘How much will I need?’
Although employers aren’t in a position to answer this question, the ASFA Retirement Standard benchmarks the amount needed by Australians to fund either a comfortable or modest standard of living in their post work years.
According to the standard, at the retirement age of 65 a lump sum of $545,000 in savings would be needed for a single person to live a comfortable lifestyle.
A modest lifestyle would require a single person or a couple to have $70,000 in savings.
The lump sums needed for a modest lifestyle are relatively low due to the fact that the base rate of the Age Pension (plus various pension supplements) is sufficient to meet much of the expenditure required at this budget level.
While this is good as a guide, it’s important for anyone heading towards retirement to seek financial advice because everyone’s situation and goals are different. To help Tasmanians plan for retirement, Tasplan is holding the Ready, set, retire expo at Hobart’s Hotel Grand Chancellor on Saturday, 21 March.
The keynote speaker will be renowned economist Saul Eslake and exhibitors will provide people heading into retirement with information on connecting with others, nurturing good health, finding purpose, sharing knowledge and skills, and estate planning.