Retirement confidence in Australia has fallen dramatically, with 51 per cent of retirees now expecting to outlive their savings, research firm Investments trend revealed. Three years ago, that figure was just 33 per cent.
“Australians’ confidence about their retirement has deteriorated significantly over the past few years,” Investment Trends senior analyst King Loong Choi said.
“The ability to accumulate sufficient wealth, potential falls in the share market and regulatory changes to the superannuation rules are all contributing to Australians’ growing angst about their retirement future.”
The most recent raft of superannuation reform is likely responsible in part for this angst, with changes to concessional and non-concessional contributions dominating headlines last year.
With many of these effective from 1 July, two in three Australians said they recognised the need for financial professionals to achieve their retirement goals, according to the report.
This need will likely be filled by superannuation funds, Mr Choi said.
“While retail funds have been top of mind for Australians’ retirement needs, the concerted effort from industry funds over the last few years in strengthening their retirement proposition has made them serious competitors for Australians’ retirement monies,” he said.
The difference this financial advice could make is significant.
Those who engaged a financial planner were found to be almost twice as likely to put their savings into retirement income products, while the unadvised spent four times as much on lifestyle expenses such as renovations and holidays, according to the report.
Meanwhile, aged care will likely take retirees by surprise, with fewer than one in five of those surveyed saying they had given it any thought.
“Australians typically do not begin thinking about or planning for their aged care needs until after retirement [but] for many, this may end up being too late for them to make arrangements for potential aged care costs,” Mr Choi said.