Ageing dynamics require holistic retirement planning: La Trobe

As more Australians enter retirement, the phase increasingly resembles a "distinct" economic life cycle, making better retirement planning essential rather than just an opportunity for financial advisers.

Speaking this morning at the Financial Standard Retirement Income Forum, now in its ninth iteration, La Trobe Financial head of distribution James Waterworth highlighted the need for advisers to consider ageing dynamics when helping clients plan for retirement.

The median age is set to rise to 45 in 2063 from 38.6 currently, and although it may seem insignificant to many, Waterworth said the surge still represents "millions of retirees".

He also noted that the population aged over 65 has more than doubled over the century, with the 85+ cohort showing a similar trend.

Because life expectancy was historically lower, Waterworth said advisers will need to slowly shift their focus to serving more retirees on the older side of the spectrum.

"Financial advisers should really focus on one number above all else, and that is 85+. Because it's the fastest growing retirement cohort. It's not people entering retirement; it's people spending well beyond 20 years in retirement, and that's the challenge," he said.

"Retirement isn't getting a little longer; it's becoming materially longer. And for financial advisers, they need to work hard to make people's retirement savings last.

"One member of a couple now living into their 90s is becoming increasingly normal, rather than exceptional."

As retirees are expected to spend 25 or even 30 years in retirement, the phase is becoming less like an event and more like a market, creating opportunities across healthcare, aged care, leisure, travel, investment services, and financial advice throughout that period.

"Industries will increasingly orientate themselves around the needs of retirees," he said.

"Housing design, healthcare delivery, aged care infrastructure, wealth management, and investment products will all be reshaped for this demographic reality... as for advisers, this means retirement planning can no longer be treated as the final chapter of a financial plan.

"In many cases, it will represent a client's longest and most complex financial journey."