Many Australians are delaying retirement by as much as five years, according to a new survey.
The expected retirement age has jumped from 60.7 years in 2021 to 66, according to the MFS Global Defined Contribution Survey, conducted annually by finance giant MFS Investment Management, with the spike attributed to anxiety about the financial climate.
The survey found that more than half (52 per cent) of Australians aged under 45 believe they will need to work longer than expected due to the economic fallout of COVID. Nearly one in three (30 per cent) think they’ll be unable to retire, compared to 21 per cent of those aged over 45.
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In better news, those anxiety numbers are down on the 2021 figures. While this might seem somewhat incongruent given the jump in expected retirement age, it may indicate that those surveyed have come to terms with the post-COVID economic climate and have accepted the reality of a probable later retirement age.
The survey found the way many expect to transition to retirement has also changed, with an increasing number anticipating a sharp end to their working lives.
The survey showed that 18 per cent of Aussies are expecting a ‘hard stop’ in their working life, compared to just 13 per cent in 2021.
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A quarter of respondents (25 per cent) planned to start a transition to retirement income stream with MySuper while still working and 22 per cent said they expected to rely either partially or fully on the Age Pension.
Although the sharp jump in the expected retirement age might surprise many, it does bring it into line with government expectations. The Age Pension age is 66 years and 6 months for people born between 1 July 1955 and 31 December 1956, inclusive, rising to 67 for those born on or after 1 January 1957 from 1 July 2023.
The survey of 1000 people who contribute to a superannuation fund also pinpoints a change in attitudes on where they will seek retirement advice. Fifty-two per cent now say they will seek advice from their super fund – a big jump from the 2021 figure of 32 per cent.
Respondents were also slightly more receptive to seeking formal advice from an adviser – up 1 per cent to 30 per cent.
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“Though planning a comfortable retirement with certainty remains difficult, it is encouraging to see confidence and conviction levels return after the destabilising effects of COVID,” said Marian Poirier, senior managing director and head of Australia and New Zealand at MFS Investment Management.
“Investors appear much more receptive to receiving advice as they increasingly assert their investment preferences, and trusted superannuation funds are poised to build out advice models.”
How has the change in Australia’s economic climate changed your retirement plans? Have you pushed back your retirement age expectations? Why not share your thoughts in the comments section below?
I worked full time until 69 and now part time at 75. 65 is the new 40.