Delaying your retirement might seem like an unpalatable option but there can be an upside in terms of physical, psychological and social benefits.

If you had been planning to retire in the near future, the global financial crises may have forced you to delay your plans and work longer so you can retire comfortably.  However, there are still a number of ways you can ensure you are prepared for retirement and are well placed to make the most of opportunities as you make the transition.

How prepared are Australians for retirement?

A large number of Australians are not financially prepared for retirement with research showing only 5.1% of working Australians are retirement ready. This figure is not surprising given the average superannuation balance for Australians aged 55-59 is just $85,561.  When you consider that the average couple needs an annual income of $27,547 to fund even a modest lifestyle in retirement, and a single person needs $19,533, the average retirement balance is not nearly enough to support a comfortable retirement.

What are the different ways you can prepare for retirement?

Although super plays a big role in your retirement income, theres more to preparing for retirement than your super balance.  For instance, it may be worth reviewing your share portfolio to ensure you are maximising your dividends and retirement income, while minimising your risk.  If you have substantial equity in your home, or sufficient savings, you could consider a low-risk property investment to grow your nest egg.  And if you already own an investment property, it could be time to review the rent you are charging or restructure your home loan.

When is an ideal time to start planning for retirement?

The earlier the better.  Retirement may not seem like the most urgent priority, but if you contribute an additional 3-5% of your salary into super from a young age, it will go a long way towards ensuring you are able to enjoy todays lifestyle in retirement.  Its never to late to start planning no matter how far off your retirement.

What is the psychological impact of not being property prepared?

Recent research shows that people who are fully dependent on the Age Pension have significantly higher levels of stress, anxiety and depression than their financially independent peers.   Only people who are prepared to lead very simple lives are good at, managing their money are able to get by on the Age Pension.  For the rest of us, relying on the Age Pension as our sole source of income means constant worry about unpaid bills and money problems.

Delaying retirement what does this mean?

Most of us cant wait to finish working and retire.  So naturally it can feel disappointing to delay retirement.  However, research shows that a gradual, rather than sudden, retirement is a healthier option.  Mental health counsellor Lynn Berger says working less but still working keeps you physically, mentally and socially active and many people experience a rapid decline in physical and mental health soon after retirement, due to lack of activity and purpose.

What can you do to improve your finances once youre retired?

Once you have retired you can receive income from a variety of sources: the Age Pension, dividends, rent, super, or your partners income.   Super can either be paid in a lump sum or as a regular income stream.  It may also be worth looking at converting assets to super to minimise the tax you pay.