Retirement can sometimes come around more quickly than we imagine.
According to the Australian Bureau of Statistics, while most of us plan to retire at 65, a significant number of Australians retire earlier than planned.*
Early retirement can come as a result of unexpected events such as redundancy, carer responsibilities, or ill health.
That's why, even if you think retirement is years away, it's important to understand your financial position and make sure you're setting yourself up for success.
ESSSuper Defined Benefit Fund member Steve tells his story of how he found financial support and security when faced with his unexpected retirement.
Steve's story
After a successful and dedicated 32 years with the Victorian Police, Steve's circumstances changed due to illness. At age 61, he suddenly needed to make a plan for the future – and fast.
"I hadn't really thought about retirement, I didn't know how it worked or what I was supposed to do. So when I got ill, I had to decide to retire quite quickly, but I didn't understand much about superannuation.
My big fear was "What do I do if I quit work? How am I going to live?" When you're working, you know where your income is coming from, so I was nervous about retirement for that reason."
Luckily for Steve, he had maxed out his ESSS Defined Benefit Fund, requiring Victoria Police to contribute funds into an Accumulation Plan. (To achieve this, an ESSSuper Defined Benefit Fund member can contribute an average of 7% per annum to their defined benefit account throughout their career. If you haven't been contributing 7%, you may be able to commit to a higher catch-up rate.)**
Despite his healthy financial circumstances, when it came to retirement planning, Steve wasn't quite sure where to start.
"I'm not particularly financially minded; all I knew was that I was contributing to my super, I didn't have a future plan. I didn't understand how superannuation worked or how you accessed the money. So I met with a Financial Adviser† from ESSSuper."
"The Financial Adviser I met with helped me to get up to speed, and after seeing all my options laid out, it allowed me to make a decision that would suit me. She drilled down to the nuts and bolts and helped me see how my super could be funnelled into a regular income stream, and what that meant for me long term."
Steve realised that his career-long contributions into his defined benefit account were about to pay off. Because he was over 60 and permanently retired, he could receive a monthly payment through a Retirement Income Stream, allowing him to live the lifestyle he wanted.
"Everything was so well explained to me, and I felt confident about what my situation was going to be when I retired. It opened my eyes as to what might be possible. It took away the fear of the unknown."
Although his decision to retire came sooner than expected, by reaching out to a Financial Adviser, Steve had the confidence to retire with ease. With a few months of retirement now under his belt, Steve is able to reap the rewards of his past contributions, along with enjoying the security of using a Financial Adviser.
With a deeper understanding of superannuation and the impact it can have on one's life, Steve found he had a new appreciation for financial planning himself.
"To anyone just starting out with superannuation: start planning from the very beginning! Retirement will come around quicker than you could possibly imagine. So, look at your options and make sure you're maximising your contributions. Take full advantage of it."
The age you retire can't always be planned, so when the time comes, it's important to know where to look for support.