A new study measuring ‘financial consciousness’ reveals nearly a third (29 per cent) of Australians are less confident compared to last year in their ability to retire comfortably at age 65.
The Financial Consciousness Index (FCI), which was commissioned by comparethemarket.com.au and developed by Deloitte Access Economics, tested 3000 individuals nationally to uncover their ability, willingness and sophistication to make a change to improve their financial wellbeing.
Those in the 45 to 54-year-old age group were the most concerned about their retirement, with 40 per cent saying they were less confident in their ability to retire at 65 than they were a year ago.
“The Age Pension age is increasing over the next five years from 65 to 67 years of age, putting Aussies under further pressure to improve their funding options if they want to enjoy any sort of an ‘early’ retirement,” said Rod Attrill, general manager of banking at comparethemarket.com.au. “This appears increasingly unachievable given only 13 per cent of respondents said they believe they are in complete control of their retirement outcomes.”
A comfortable retirement seems even further from grasp for the almost one-fifth (17 per cent) of respondents who said they would have to dip into their superannuation account if they were suddenly unemployed or unable to earn an income for more than three months.
“Some 27 per cent of men and 33 per cent of women reportedly have no superannuation set aside,” Mr Attrill said.
“It is imperative that Australians begin planning ahead and investing in their future, no matter how far away or unobtainable it may seem.
“Consider consolidating your super funds if you have multiple accounts as not only will it be easier to manage but it also means you will only have to pay one set of fees,” he added.
The Financial Consciousness Index also found that as you get older you have more understanding and are more confident that you are getting the best deal with key financial products.
This marries up with YourLifeChoices’ own research in the recent Retirement Income and Financial Literacy Survey, which found a massive 86 per cent of respondents managed their own financial affairs.
Just over 70 per cent said they had managed their finances in the past few years 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.
Are you confident about living comfortably in retirement?
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