Will your savings last?
While living longer and healthier is undoubtedly a good thing, it does increase the risk of your retirement income running out. This is known as longevity risk. It's important to aim to ensure that your super and other investments can keep generating income for you.
Another important risk which must be considered is investment risk. During the share market falls of 2008 and 2009 many people's superannuation decreased in value. For younger people, who did not need to access their super for decades, this may not have been so serious as they theoretically have time to allow markets to recover the lost value. However people approaching retirement at this time were hit with a double risk factor. Just when longevity risk meant they would probably be living longer, investment risk meant they had less money to stretch out.
A third risk to your retirement income is inflation risk. A basket of groceries that cost $100 in 1979 now costs over $400. This erosion of purchasing power can prevent you from meeting your retirement goals.
