We all know the phrase, ‘indexed to inflation’. If it’s referring to money you’ll be receiving, that’s a good thing. Not so much when it’s the other way round.
But perhaps we should take a more holistic view of things. Shouldn’t we be more concerned about things being indexed to happiness? Investment managers Challenger think so, which is why they have published their inaugural ‘Retirement Happiness Index’ report.
Challenger teamed up with independent research house YouGov collecting data from more than 1000 Australians to create the report. That produced an overall score of 70 for Australians over 60. The score encompasses a range of factors such as mental and physical health, social connections, purpose, and financial well-being.
Unsurprisingly, it turns out that many Australians would be a lot happier if their worries about finance diminished. But what else does the Retirement Happiness Index reveal?
Retirement Happiness Index revelations
Along with financial security, physical health stood out as one of the most important factors in finding happiness in life. Both were flagged as areas for potential improvement, with 61.5 per cent nominating physical health and 56.3 per cent citing financial stability as potential problem areas.
The highest-scoring happiness factor was activities and hobbies, with a score of 79.5, followed by mental health (77.6).
Two in three Australians over 60 said they’d be much happier without having to worry about finances in retirement. Further highlighting the link to financial security, 70 per cent believe a guaranteed income in retirement would significantly boost happiness.
According to Challenger Chief Executive, Customer, Mandy Mannix, this highlights the areas on which her company needs to focus.
“Almost half of respondents identify financial security as an area they wish to improve,” she said. This highlighted “the work [our industry] must do to safeguard retirees’ golden years and foster a better, happier retirement.”
On a positive note, Australians are showing a willingness to better educate themselves in this area, Ms Mannix said.
“Reassuringly retirees felt their happiness would improve with access to the right financial education.”
Along with regular income, this would give retirees the confidence to spend and capacity to pursue their passions, she added.
Next steps
Ms Mannix believes the inauguration of the Retirement Happiness Index could be a game-changer for Challenger and other industry players.
“We’ve launched the Retirement Happiness Index to explore new dimensions of retiree satisfaction,” she said. It is fantastic to see the majority of Australians are enjoying or expecting a happy, healthy retirement.”
The report also facilitates “another way that Challenger looks to deliver on its purpose of providing customers with financial security for a better retirement, Ms Mannix stated. “A better retirement is about so much more than finances, she continued. “But having a degree of confidence that your savings will last, plays an important role.”
Further insights into the inaugural Retirement Happiness Index can be found on the Challenger website.
What are the drivers of retirement happiness for you? Do the Retirement Happiness Index results reflect your overall feeling? Let us know via the comments section below.
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