We spend our working lives raising families, paying off mortgages and HECS debts, and diligently building up our superannuation – all with one goal in mind: a comfortable, fulfilling retirement.
But when the time comes to enjoy the fruits of our labour, many Australians hesitate. In fact, the 2020 Treasury Retirement Income Review found that a large number of retirees are leaving the majority of their superannuation untouched – often passing it on as a bequest.
So, what’s holding people back?
The reluctance to spend
In my work with clients at Capital Partners, I’ve noticed a common theme: people are often reluctant to spend their capital during major life transitions – whether it’s retirement, divorce, or the loss of a partner. Some of the reasons I hear include:
- Fear of running out of money – especially with uncertainty around future health, aged care costs, and financial markets.
- Money personalities and past experiences – many are shaped by parents who struggled through retirement or relied solely on the age pension.
- Lack of clarity around goals – if you don’t know what you want to do with your money, it’s hard to feel confident spending it.
During COVID, the government halved the minimum pension drawdown rates. Many retirees opted to take the minimum, preserving their wealth in a tax-effective environment. While this made sense during a time of limited mobility and health concerns, it also highlighted a broader issue: we are not always comfortable spending what we have saved.
Real stories, real impact
Here are just a few examples of how clarity and planning helped our clients live more fully:
- Bringing Retirement Forward: A couple in their early 70s believed they couldn’t afford to retire. But after mapping out their resources and goals, they realised they could not only retire earlier than expected but also travel and support their children – two things they deeply valued.
- A Fresh Start After Divorce: One client, recently divorced, had long dreamed of a particular overseas trip. Once she understood that her financial position could comfortably support her goals, she booked it – and came back with a renewed sense of confidence and joy.
- A Family Holiday to Remember: Another client downsized her home and ended up with more equity than expected. With her financial plan in place, she took her entire family on an overseas holiday – creating memories that will last a lifetime.
Planning with Purpose
At Capital Partners, we help clients build their Wealth Map, starting with a deep dive into your values and goals. From there, we conduct a Capital Adequacy Analysis – a detailed look at your income, assets, and investment assumptions – to understand how long your capital may last and what it can fund.
This process often brings peace of mind. It’s not just about numbers – it’s about knowing you can live the life you want, without fear of running out.
So, here’s the question: Are you living your retirement, or just preserving your wealth for someone else to enjoy?
If you’re unsure, maybe it’s time to contact us – let’s revisit your goals and see what’s truly possible.
