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Key factor in financial security

One in seven Australians is aged 65 and over, and our ageing population is growing at an accelerating rate. And while people are living longer, they are not necessarily living better, according to Financial Wellbeing – Older Australians, an ANZ-RMIT analysis.

It says that a review of data at a macro level delivers a series of positive findings about the lives of older Australians. Compared with other age groups, the ANZ research indicates that people in retirement are better off, have higher levels of financial wellbeing and greater financial capabilities.

However, a closer inspection of the data, conducted by RMIT at ANZ’s request, shows that older people are over-represented in the groups at risk of financial hardship, with almost one-third (31 per cent) having less than $5000 in liquid assets.

The report attributed the biggest contrast in financial behaviours to “active saving behaviour”. It said older Australians who were “struggling” scored very low in this area compared to those who had “no worries”.

“Active saving is increasingly being recognised as a critical financial behaviour that builds financial resilience and strongly contributes to financial wellbeing,” it said. “Active saving refers to saving money regularly – even small amounts – for unexpected expenses, for ‘rainy days’ and for short-term goals.”

A recent YourLifeChoices poll found that one in five retirees does not have an emergency fund.

The RMIT-ANZ analysis showed:

  • Older people in the survey scored significantly higher than younger people among all psychological and attitudinal factors. Over longer periods of time and with greater experience in a range of financial decisions, confidence generally increased.
  • Older people were more likely to have a negative attitude to borrowing and were less likely to be impulsive in their spending.
  • Older people reported that they were confident money managers, prompting fears of a mismatch between confidence and actual financial decision-making abilities.
  • Self-funded retirement contributed more to financial wellbeing scores than income from wages, self-employment or the government.
  • Outright home ownership was associated with higher financial wellbeing, both for people aged 18 to 64 and those aged 65 and over.
  • People who had stable and predictable incomes had higher financial wellbeing.


The analysis mirrors research undertaken by YourLifeChoices. In our Retirement Income and Financial Literacy Survey, just over 70 per cent said they had managed their finances either well (50.4 per cent) or very well (20 per cent). Sixty-three per cent said they understood their finances and investments well (50.5 per cent) or very well (13 per cent).

More than half (52 per cent) said they were either confident or very confident about their long-term future. However, 19 per cent viewed their future as negative or very negative, with the balance in the neutral category.

In the same survey, almost half of 2328 respondents were either convinced their retirement savings would not last or were unsure.

Health was a major contributor to wellbeing ratings in the ANZ survey. It reported:

  • One-third of people aged over 65 are living with chronic pain.
  • Rates of dementia are increasing, with 250 new diagnoses daily in Australia.
  • Illness, pain and disability greatly limit an older person’s capacity to work and increase expenses related to care and medical and costs.


The report concluded: “Having adequate income in retirement also differentiates those who are doing well from those who are struggling. Those with income from superannuation or annuities generally have higher financial wellbeing and this emphasises the importance of supporting younger people to build their retirement savings.

“The changing shape of work (including increasing reliance on the gig economy and casual work) may lead to a different picture of financial wellbeing for older people in coming years. The over-representation of women in unpaid caring roles, casual, part-time and low-paid work will also continue to result in a higher risk of financial disadvantage when older.”

Were or are you a good saver? Where did you learn about financial planning?

Related articles:
How to build an emergency fund
The problem with driverless cars and investing
How to simplify our tax system

Janelle Ward
Janelle Wardhttp://www.yourlifechoices.com.au/author/janellewa
Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.
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