Australians fear for retirement prospects


By Leanne Abbas

Email Article Print Article

Australians were increasingly becoming more concerned about their retirement outcomes as the need to upgrade retirement products and prioritise aged-care costs became more apparent, according to an Investment Trends report.

The “2016 Retirement Income Report” revealed only 44 per cent of Australians over the age of 40 felt prepared for retirement, down from 49 per cent in 2015, while 51 per cent of those already retired expected to outlive their retirement savings, up significantly from 33 per cent in 2013.

The report was based on a survey of 6987 people over the age of 40 conducted in September and October 2016.

Investment Trends senior analyst King Loong Choi said confidence in retirement outcomes for Australians had deteriorated as a result of share market performance and legislative reforms.

changes to the superannuation rules are all contributing to Australians’ growing angst about their retirement future,” Choi said.

The study also found half of working Australians believed they would need a minimum of $3000 a month to have a comfortable lifestyle, however, only one in three felt that was achievable.

Furthermore, it revealed two in three people recognised the need to seek advice from either a financial planner or their super fund to help them reach their retirement goals.

“Super funds and financial planners are best placed to inform, educate and advise Australians on their retirement finances,” Choi said.

“While retail funds have been top of mind for Australians’ retirement needs, the concerted effort from industry funds over the last few years in strengthening their retirement proposition has made them serious competitors for Australians’ retirement monies.”

The study also showed retirees who used a financial planner allocated nearly twice as much of their savings to retirement income products than those who did not, while those without a planner spent four times more of their retirement savings on lifestyle activities, such as renovations, holidays and new vehicles, than their counterparts.

Investment Trends research director Recep Peker noted that revealed a significant opportunity for retirement product providers to innovate and educate consumers around the products they could offer.

The study also showed the need to prepare Australians for aged-care costs, considering less than one in five Australian pre-retirees had thought about their aged-care needs.

“Australians typically do not begin thinking about or planning for their aged-care needs until after retirement … but for many, this may end up being too late for them to make arrangements for potential aged-care costs,” Choi said.

« Back to Articles