HomeFinanceRetirement worries hit a 10-year high, new research shows

Retirement worries hit a 10-year high, new research shows

The number of older Australians who consider themselves retirement ready has hit a 10-year low.

Ms Irene Guiamatsia, head of research at independent financial analytics organisation Investment Trends, says only 37 per cent of pre-retirees say they feel prepared for retirement.

“This is a 10-year low,” she said.

The research also found that nearly half of that same group are reluctant to use their super fund’s pension products. Most believe those products do not meet their retirement needs.

“What we’re seeing here is a significant proportion of members lack confidence when it comes to retirement,” Ms Guiamatsia said. “Some of them are certain that super funds cannot meet their retirement needs.”

What’s the problem?

Ms Guiamatsia says super funds are falling short of member expectations in this area.

Backing up that theory are figures released earlier this year by Investment Trends. They showed that nine per cent of members indicated an intention to switch funds in the next 12 months. The figure was a 50 per cent increase on the previous period and a 13-year high.

Investment Trend’s research also indicated last year’s government Quality of Advice Review has perhaps not had its intended cut-through – yet. The review’s stated aim was “to ensure Australians have access to high quality, accessible and affordable financial advice”.

However, research found only one per cent of members are utilising the intra-fund advice offering available from their super fund. Ms Guiamatsia said such a low number was concerning.

“The average age of those advised members is 52,” she said. “One could argue it’s a bit too late depending on the individual circumstances.”

While few would have expected the government review to produce an overnight transformation, the evidence suggests members are more retirement reluctant than retirement ready.

Closing the gap

Another key finding in the latest Investment Trends report was that the retirement adequacy gap – a measure of perceived ability to fully fund retirement – has doubled in the past five years.

Investment Trends has been reporting this metric for eight years. Ms Guiamatsia says the latest numbers show that “over one in five retirees are concerned about outliving their retirement savings.”

This is despite a push from several sectors for retirees to spend more super and leave less as an inheritance. Those who are concerned about outliving their retirement savings are hardly likely to succumb to that push.

The number of retirees and those still working who still have such concerns, may be linked to another of the report’s findings. Coming in at number one on the list of ‘unmet advice needs’ is retirement advice.

“It is natural that retirement and superannuation and financial advice would be intricately connected,” Guiamatsia said.

For many, though, that connection has not yet resulted in them receiving adequate advice. This leaves those still in the workforce anything but retirement ready.

Do you feel retirement ready? If not, what do you feel is stopping you from reaching that feeling? Let us know in the comments section below.

Also read: Finance law change will cut red tape but will consumers suffer?

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Andrew Gigacz
Andrew Gigaczhttps://www.patreon.com/AndrewGigacz
Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.
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