Retirement income worries are rife

By Grace Ormsby

January 21 2020
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More than half (53 per cent) of Australian seniors are worried they’ll outlive their savings and investments, a new report has revealed.

Research from National Seniors Australia also found that an even higher proportion (two-thirds) of retirees actually expect to outlive their savings within the next 20 years, whether or not they are worried about it.

The report also revealed that higher levels of worry around retirement savings were prevalent among younger people who are not yet retired, which the association attributed to individuals adjusting to their “actual” circumstances in retirement, whether they had forward-planned or not.

For the association’s CEO, professor John McCallum, the findings illustrate the extent of concern felt by older Australians with regard to financial security.

“Australia has one of the best pension systems in the world, yet Australian retirees are still showing high levels of worry that they will outlive their savings,” he commented.

“This shows a need for better advice and education to help older Australians manage their savings so they can have the confidence to spend their money and enjoy retirement.”

Despite this, the research did find that having a reliable source of income that will last for life is a key factor for worrying less.

Australians without any superannuation were the most likely to worry frequently, and were most likely to be on the Age Pension.

According to National Seniors Australia, those people with a defined-benefit pension or a lifetime annuity reported the lowest levels of worry.

It was also notable that the group of people living on dividends, rent or business income also expressed they were relatively unconcerned about their finances.

“These people are likely to have more wealth and be in a better financial position than most retirees,” the report read, pointing out a need for better financial products to be available for people who are commencing their retirement.

Superannuation

Individuals who do rely on superannuation as their main source of current or future income in retirement worry less than retirees who rely on the Age Pension as their main source of income, the report outlined.

Highlighting the “not fully mature” nature of the super system in Australia, it was outlined that most current retirees “weren’t required to make superannuation contributions for a large part of their working career”.

Despite this, the results showed “it is clear that superannuation is not only providing a reliable source of income in retirement, but it is also reducing financial worries for many retirees”.

According to the National Seniors Association, this should improve as the system continues to mature.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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