Survey identifies critical factor in financial wellbeing

We’re living longer but are we enjoying those extra years?


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?



    To make a comment, please register or login
    4th Dec 2018
    The two areas which promote a higher probability of having a decent retirement are as always owning your own home and how you manage the money you earn over a lifetime.
    Whilst I get some retirees suffer life setbacks many make their own well being or poverty.
    My wife and I have worked hard, saved hard and gone without much in our lifetime whilst our peers whooped it up. The result has been that the past 8 years have been extended travel years and we have no real financial worries other than making what we have last the distance.
    Those who are struggling may want to consider if they contributed to their own situation. Life is so full of choices and making lifestyle choices often defines the future. No escaping this...but some are also lucky to succeed in spite of poor life choices. That's life.
    4th Dec 2018
    "Those who are struggling may want to consider if they contributed to their own situation"?
    In some cases it's true, Mick but in some other cases it's not, such as being victims of fraud, scams and poor investment advice from the so called professional investment advisers.One shoe does not fit all, Mick.
    Karl Marx
    4th Dec 2018
    Agree 100% Mick. My mother taught me a lot about life & what should be your goals in life. My parents lived through the depression, WW11, rationing after the war. People from that era knew how to save no matter how small it was as it all adds up in the long term.
    4th Dec 2018
    It fits nearly all HS and I think I acknowledged the few who suffer bad life experiences.
    Old Geezer
    4th Dec 2018
    Well I have had more bad luck than many have in many lifetimes but I still managed to provide for my own retirement. So it's good management not luck that plays the major part in how one does in life.
    4th Dec 2018
    Clearly, you have no idea what real misfortune looks like, OG. You are just a self-opinionated narcissist with zero empathy and not even an ounce of human decency.
    double j
    4th Dec 2018
    Well said Mick, I Agee with everything you say, we are in a similar situation
    Karl Marx
    4th Dec 2018
    We reap what we sow. People are under a lot of pressure to spend, consume. Buy what you need not what you want. Live minimalist, less anchors is less stuff to worry about.
    We all live by our choices in life & to be financially secure is one of them.
    I have seen family & friends squander money, spend for the sake of it, but the latest gadgets, latest TV's etc, new car every 2-3 years & bikes, jet ski's boats, all sorts of boys toys, while I saved, salary sacrificed, paid off my house as soon as I could to become debt free. Now I can holiday, live anywhere I want while those same family & friends are trapped paying off mortgages & personal debt that should of been long gone. Then they say how lucky I am to be in such a great position.
    Luck had nothing to do with it. I worked hard, saved, retired & now have the freedom to do what I want & be happy.
    But I still only buy what I need. No stuff, no anchors.

    4th Dec 2018
    A lot easier to hang on to money when we were younger, Mick. One had to save up and then bought an appliance with the savings, getting about 7% off for paying in full. These days when everything is on plastic we get all items in advance and then try to stutter the amount off with interest rates of up to 21%. Might even be higher some places, just used mine for an example. Of course I square it every month.
    Karl Marx
    4th Dec 2018
    Credit is to easy these days as everyone wants you to spend, consume. I have a visa card & that gets paid out every month like you say CJim. Can't remember the last time I paid interest. If I don't need it I don't buy it, If I can't afford it I don't buy it.
    4th Dec 2018
    Jim - interest rates of 17%? I remember. Bloody tough.
    Goods also cost heaps more........think back to what even a pair of shoes cost.

    The plastic is good when you use it correctly. That means picking up 'free' money (Rewards Schemes) and paying the full balance when due. Those who pay the minimum payment are stark raving nuts as the interest rate is huge and this is money flushed down the WC.

    You are correct 1984. Ditto.
    Old Geezer
    4th Dec 2018
    I find it so much easier to pay for things today as they are so much cheaper than when I was younger.
    4th Dec 2018
    We lived on fresh air and dust when we were younger, growing food, making clothes and furniture out of discards, building our own home (with no building skills or experience, but learning everything from books as we went along). We rebuilt a wrecked car. Bought and recycled junk of every kind. Fixed our own appliances. Can't do any of that anymore - partly due to poor health and partly due to changed regulations and computerisation of everything. Happily, all that hard work enabled some healthy savings, but I wonder if - given the stupid pension system - they are really doing us any good. Seems they just cost us guaranteed income and concessions!
    4th Dec 2018
    Look after the pennies and the pounds look after them selfs

    4th Dec 2018
    AS most of you have said life is what you make of it if you work hard and save you should have no problems apart from the occasional set back. I have a brother in law who virtually gambled and bet all his wages away and was paying rent until he turned 65, now he is living in a one bedroom bungalow at the back of his daughters house on the pension with no savings, not much of a life now and still paying some sort of rent.
    4th Dec 2018
    The irony is you get it on one side of life or the other. We chose the working years and have been fortunate enough to be able to survive well now.
    4th Dec 2018
    When did saving money go out of fashion? Its only being "increasingly recognised" now, as financially beneficial? My parents taught me to save from the age of 5, and I always put away 20% of my pay. Saving used to be normal, as was the long-term view of finances. Unfortunately, too many people allow themselves to become a victim of the consumer society, because they don't think.
    4th Dec 2018
    Not saving money works well for investments made in times of high inflation. Consumerism and feel good waste only comes back to bite you. It is everybody's right to choose but there should be no recriminations and blame if bad lifestyle comes back to bite one, which it almost always does.

    4th Dec 2018
    Always been a saver and investor .
    Paid off mortgage in 3 years and then started investing in property & shares
    At one point was putting away 90% of salary in investments . Those were the days
    4th Dec 2018
    You obviously had a very high income, and didn't suffer the massive expenses of things like a disability or chronic illness of either yourself, partner or children. Lucky you! Also likely didn't face natural disaster like flood or fire destroying your home.

    Spare a thought for those who faced major life challenges, often with minimal or no family or community support, no education, and a psychological disposition - resulting from extreme deprivation of affection and guidance in childhood, and/or considerable abuse - that rendered them unable to trust the system, much less to take investment risks.
    4th Dec 2018
    You have no idea what I've been through.
    My post above was AFTER i crawled out of the wilderness with zero, zlich, zip to my name

    As for fire and floods, wouldnt have been a problem, covered by insurance . You should do the same
    4th Dec 2018
    Yes Lothario I got rid of my mortgage as quick as I could , however not as quick as you it gives you a huge advantage money wise.
    Old Geezer
    4th Dec 2018
    I only had one mortgage on a house an paid if off in six months. Been investing elsewhere since and didn't do well until I retired. I wish I had retired at 20 now.
    4th Dec 2018
    All these self-opinionated boasts must be sickening for those who haven't had it so good. You people have no idea. Lothario, I pulled myself up out of enormous hardship, and made it a self-funded homeowner after 30 years of incredible hardship, only to then have to give up work to care for a disabled partner.

    Nobody ever saves 90% of their salary unless they are very fortunate indeed. Insurance? Clearly you know NOTHING about natural disasters and insurance. Sure, we were well insured, but it NEVER covers all the losses - let alone the incidental costs that result from the upheaval and emotional trauma. Car insurance paid out 1/2 of the real value of our car after a careless driver ran into it and it was written off - declaring $5000 of major improvements to be ''routine maintenance that added no value'' and a tiny scratch to reduce the value by over $1000 - and hire care insurance proved useless as it was limited to 4 weeks and we were without a vehicle for 4 months.

    We had medical insurance for our disabled child too, but that proved a SICK JOKE. And when I had major surgery, the gap was in the thousands, but if I'd had no insurance the operation would have been free! We've spent 5 years fighting DVA for compensation for an accident that was never recorded by a negligent medic, and the complications that resulted from being forced back to marching duties despite a medical certificate declaring the leg had to be elevated and rested for 6 weeks.

    Yes, others might have succeeded in defending their rights, but when you've been persecuted, abused and denigrated for your entire life - told every day of childhood that you are scum and filth - you have neither confidence in yourself or in the system, and nobody to advise or support. The ongoing injustices and the struggle to overcome the psychological harm suffered in childhood are clearly way beyond the comprehension of those who don't experience these challenges.

    Try paying of a mortgage when you have medical debts for your child equal to the price of SIX houses! I think we did incredibly well to be self-funded homeowners, but life is still a monumental struggle. You never fully recover from the torment we suffered as children. Nobody can.

    You lot may have material wealth, but you are VERY VERY POOR. When it comes to understanding, compassion and empathy, you have none - and that makes you paupers in all the ways that count.
    Karl Marx
    4th Dec 2018
    My hat's off to you OGR.

    4th Dec 2018
    It's easy: spend less than you earn.
    6th Dec 2018
    Easy if you earn enough to cover the cost of essentials. Otherwise, it's impossible!

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