Many retirees fail to consult their partners in planning

A large number of retired Australians are independently navigating their way through their retirement finances.

Retirees ‘flying solo’ with finances

A large number of retired Australians are independently navigating their way through their retirement finances with the majority not involving professionals and many not even involving their life partners, according to new research from global asset management firm Franklin Templeton.

The research shows that while nearly half of Australian retirees believe a financial adviser is important to their retirement planning and generating income in retirement, only 24 per cent of them are working with a financial adviser. This is the lowest incidence among global peers surveyed, with 57 per cent of retirees in Canada and 47 per cent in the US working with an adviser.

According to the YourLifeChoices Retirement Matters survey, 55 per cent of members said that they had or would consult a financial adviser about their retirement.

Only 54 per cent of Australian retirees with a spouse or partner say they coordinated their retirement planning with them prior to retiring, which is also the lowest among global peers, reflecting a potential lack of forethought when it comes to this important transition.

Franklin Templeton’s Manuel Damianakis said that while everyone should be encouraged to take a strong personal interest in their retirement finances, attempting a ‘flying solo’ approach may come at a cost.

“Eighty-one per cent of those retired have never developed a written retirement income plan and only 43 per cent told us they have a strategy to generate income for retirement that could last 30 years or more.”

 


Australians’ strong independent approach to retirement finance is not necessarily reflected in action, with around half of Australian retirees checking on their retirement savings once a month or more.

Furthermore, one in three retirees say that when it comes to spending their retirement savings, they don’t have a strategy – they just spend what they need each year and hope it will last.

Many also lack a contingency plan if they are unable to manage their finances.

“Given ongoing market volatility and protracted low interest rates, it would be unwise for retirees to adopt a set-and-forget approach to their savings and investments, and this is often where those working without professional advice become unstuck,” said Mr Damianakis.

“As an industry and as a society, we need to navigate a better path where all retirees can access professional advice and still feel they have sufficient self-management and control.”

This global survey was conducted in Australia for the first time in May 2019, through an online questionnaire with more than 2000 Australians.

Did you consult with your partner about your retirement income plan? Did you use a financial adviser?

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COMMENTS

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ozrog
13th Nov 2019
10:08am
Financial planners can be a rip of why pay them $8000 pa when your investments make $10,000 for you and you can do it yourself.
Agnes
13th Nov 2019
10:36am
You may have a point there ozrog, especially when you consider that each set of managed funds , wrap accounts, Listed Property/investment trusts, etc all have their own fees over and above what the financial advisor charges annually. But on the other hand I don't have the knowledge or confidence to do it myself, and as I have an SMSF (which the advisor manages and ensures compliance / audits etc, with my input) which has a reasonable amount of money in it, i am happy to pay for his knowledge/advice/service.
ozrog
13th Nov 2019
10:42am
Agnes i know of someone that moved their SMSF to a industry fund and they are now thousands better of.
VeryCaringBigBear
13th Nov 2019
10:46am
Many SMSFs outperform industry and retail funds so that SMSF ,must have been badly managed.
ozrog
13th Nov 2019
10:51am
VeryCaringBigBear not after you take all the fees and charges into account. Industy super has been performing well between 7 and 10%.
VeryCaringBigBear
13th Nov 2019
11:12am
The fees on my SMSF are 0.15% of the balance which Is an awful lot less than an industry fund changes. That's why SMSFs perform a lot better than industry funds.
ozrog
13th Nov 2019
11:21am
VeryCaringBigBear my fees are $120pa not sure of the percentage but very miminal.
Agnes
13th Nov 2019
12:19pm
You are both giving me food for thought, and I will clearly consider matters further. But I must add this financial advisor has always done a good job by me and so far this year the SMSF performance is 17% ( and yes I know a rising tide raises all ships) and over the last 3 years 10%
VeryCaringBigBear
13th Nov 2019
12:27pm
Ozrog what about all the hidden arbitrage fees? You need to work it out from statement to statement not believe what they tell you it is.
ozrog
13th Nov 2019
12:34pm
VeryCaringBigBear i don't have any insurances and earnt $2000 on a $15000 amount. I know it doesn't seem posible i have problems believing it as well.
VeryCaringBigBear
13th Nov 2019
3:21pm
$120 is 0.8% in fees. Way to expensive for me.
ozrog
13th Nov 2019
4:13pm
VeryCaringBigBear thaks for that info.
mogo51
13th Nov 2019
10:55am
I don't trust financial planners, especially banks and Insurance co connected. I have been retired for 5 years and spend as little as I can watch year, so my partner will be ok when I check out. I don't have much so frugal is a must.
OJ21
13th Nov 2019
11:01am
Financial adviser pricing is ridiculous. Just another parasite the Government created to navigate their ridiculously complex retirement system. Super funds, when they say, free financial advice, are joking. They just recite a set scenario and don't help you unless you pay. It should be part of the super system to help its customers.
vix
14th Nov 2019
8:16am
Very True!! retired politicians pensions and other civil servants like retired Peter Hollingsworth , Catholic archbishop who gets $600,00per annum don't need financial advisors. Tax payers pay for their "entitlements to luxury" whilst pensioners are expected to live on $20,000 per year. This is a major inequity that needs to be addressed as it is disgusting!!!
Chris B T
13th Nov 2019
12:14pm
Life Partners are just That, so why not involve them in financials that are life time decisions.
Aussie
13th Nov 2019
12:37pm
Agree with all comments ...my super in industry fund i deposit into a few $$$ left from my pension and draw some when i need tax free .... works great for me and super super cheap
VeryCaringBigBear
13th Nov 2019
4:29pm
How can you deposit money into super when on the OAP?
TREBOR
13th Nov 2019
9:26pm
Pensioner with a casual job?
Aussie
14th Nov 2019
12:05pm
Correct TREBOR ..... A self manage fun with CBA or if you want get an account with the industry superfund then a shelf company with all the requirements to operate and work as a service person with small salary and a work contract to work only 2 or 3 days a week and only a few hours also a salary sacrifice deposited on your super on top of the normal super % that is required to pay.

Your pension is normally paid on your personal account then transfer some $$$ to the company account and invoice issue for maintenance services (Lawn mower and cleaning or ???) witch you may need to do on weekends and some weekdays. Then is easy withdraw funs as you need them because you are retired and over 65 (Only small fee for withdraw).

Other things - Because you are working you can get Work Bonus and deduct $$$ every CL pay

At the end of the year ATO already prepare your returns automatically so just follow what they present to you (Normally no tax to pay and get a return for that small tax you pay during the year and all this because you are below the thresholds available

So is all legal and is only how you structure your income and expenses with the legal options available.

Manage yourself and do not get rip-off by all these super professionals with many degrees and other papers to justify there ignorance in finances just research what is legally available to you and use it to your advantage.
eckac
13th Nov 2019
12:47pm
When Financial Planners stop charging their fee on the value of your investment but on the annual investments result, with a base (fixed) account keeping fee, I would consider using their services, but I am managing, so far, to get a good return outside of the risky, poorly managed share investment market and etc.
eckac
13th Nov 2019
12:47pm
When Financial Planners stop charging their fee on the value of your investment but on the annual investments result, with a base (fixed) account keeping fee, I would consider using their services, but I am managing, so far, to get a good return outside of the risky, poorly managed share investment market and etc.
TREBOR
13th Nov 2019
12:57pm
Traditions of the retiree community? (humph)... booze, pokies and badly planned trips and buggar the consequences!

Fires everywhere and caravans are still arriving here... (sighs) ..just a nice little holiday in the smoke...
ozrog
13th Nov 2019
4:24pm
A bit Harsh TREBOR i have worked most of my life and gone without to raise and support my children who are now adults. Did drink when they were growing up as always needed lifts here there and eveywhere and holidays were never affordable. Now they are independent its my turn to have the odd drink and catchup on holidays i missed out on for 20+ years.
ozrog
13th Nov 2019
4:26pm
Should read did not drink.
TREBOR
13th Nov 2019
9:27pm
It was tongue in cheek, ozrog - a twist on churchill's thing about the Royal Navy .. Rum, the lash, and buggary!!
TREBOR
13th Nov 2019
9:32pm
Know the feeling, rog - like that guy in Legends of The Fall, I did everything they said to do... and got a kick in the ass for it....

Get a job, put your best foot forward.. there's a good boy..

Wear the green, serve the country... there's a good boy...

Always put duty and honour first.. there's a good boy....

Work hard and reap the rewards... there's a good boy....

Be the best at what you do .. there's a good boy...

Look after your missus and kids in divorce and take it like a man and move on and rebuild on sheer hard work .. there's a good boy...

... and then Tracey Chapman sings about how you give your life and are invariably they leave you with nothing...

No wonder I use Paul Simon's 'The Boxer' as a man anthem....
geordie
14th Nov 2019
8:45am
You sound a bit bitter Trebor but Im right there with you buddy. Do the right thing all your life and get screwed. Life partners can become not life partners when you show them how much they can snatch and run..
I also had to start all over at age 57. Once bitten....
Aussie
14th Nov 2019
12:13pm
Well geordie .... on my book TREBOR is very realistic and for sure not a bitter man .... and by the way I restart my life 3 times and going my fourth time .... F ,,,ng great full of adventures and I am over 70 he he he he
gnome
13th Nov 2019
2:17pm
Lack of trust in Financial advisors may be the Key.
TREBOR
13th Nov 2019
9:33pm
How did 'trust' enter this discussion? (snuckles)...
ex PS
15th Nov 2019
9:20am
I paid for Financial Advice once. It was just before I decided to retire and was with my Industry Fund . It was the best $350.00 I have ever spent, it confirmed a lot that I allready knew and filled in a few gaps that I didn't even I had.
It is just advice, take what you need, leave the rest. Some of it will come in handy as your retirement unfolds.
OJ21
15th Nov 2019
1:35pm
All my experiences have been ---- unless it looks like you have substantial funds to play with they don't want to know you and if they do bother to acknowledge your existence they give you a "what if" case study, and then comes the paperwork, "sign this, it is our pricing schedule" - usually starts at $3000 for basic advice.
ex PS
16th Nov 2019
8:15am
I had an Advisor who worked for my Industry Super Fund. Rather than take my money and invest it, he taught me how to manage my fund myself.
If your advisor is not asking about your attitude to risk or what your expectations for returns are, you need to assess the risk of dealing with them.
There is a difference between an Adviser and a Manager.


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