You spend half your life working hard to make a living.

So when the time comes to down tools and put your feet up for a while, you want to be able to afford to live life to the fullest.

When Barnesy wrote those now classic lyrics in the mid-80s, he clearly wasn’t thinking about what would happen once that ‘Working Class Man’ retires.

Three decades on, workers from all industries and occupations understand all too well the importance of thinking about tomorrow.

In the dozen-or-so years I’ve been providing financial advice, I’ve had countless discussions with clients about how to best manage their retirement savings and avoid the pitfalls that can lead to financial disaster.

Many of us are concerned about avoiding unnecessary risks that could “blow up” our retirement plans, with the discussion usually turning to investment selection or possible future changes to superannuation rules.

But most of us never even consider the one thing that could have a major impact on their post-work plans.

The BIGGEST risk facing most retirees is the risk of outliving their money.

Australia truly is the lucky country. We are living longer and enjoying a better quality of life, with Australians now experiencing the highest life expectancy rates ever recorded in this country.

But the flip side of this extended good health is that we also need our savings to last much longer.

Someone who is planning to retire at the age of 65 still has an average of 20 years – or around one quarter of their life – ahead of them, according to the latest figures from the Australian Bureau of Statistics.

Many of us will actually continue to live well into our 90s and beyond.

This means that you may need your retirement savings to support you for 30 years or more.

For someone who has never thought about retirement in those terms before it can be a sobering thought.

Consider also that in the 30 years from 1986 to 2016, the cost of living in Australia increased by more than 150% according to the Reserve Bank of Australia. This means that the price of a “basket of goods and services” valued at $100 in 1986 would have skyrocketed to cost more than $250 three decades later – with inflation averaging 3.2% pa over the period.

So what does all this really mean?

Aside from the fact you need to start seriously thinking about saving for retirement much earlier, it’s also now more important than ever to consider the way those savings are invested.

With cash rates at historic lows, Australians should consider investing a portion of their retirement savings in growth assets such as shares and property, in order to maintain their long-term purchasing power.

Australian shares returned an average of 10.2% pa in the 30 years to 2016, slightly outpacing Australian property (9.7% pa) and international shares (8.0%) over the same period.

Growth assets are generally subject to more volatility (short term fluctuations in price), however volatility should not be mistaken for risk – after all, saving for retirement is about playing the long game rather than getting caught up in short terms wins or losses.

Money saved during those hard years of work helps provide the foundation for life after retirement. But building a solid financial future free from the risk of outliving your savings means making sure your retirement savings are working hard for you now as well.