The sense of preparedness by Australians for their retirement has improved slightly over the last 12 months, increasing by 2 per cent to 46 per cent in 2017.
“Fewer Australians are worried about external factors, such as market performance and regulatory changes eroding their super savings, compared to 2016, and this has led to more individuals feeling equipped to face retirement,” said Investment Trends Senior Analyst, King Loong Choi.
Yet, despite this improving sentiment, retirement remains a concern for many Australians, with the Investment Trends ‘Retirement Income Report’ revealing that only one-in-four people believe they will be able to live comfortably in retirement.
“Many Australians are concerned they will not be able to reach their retirement goals, and only one-in-three believe they can do so without the help of professional assistance,” said Choi. “This highlights the important role that advice providers play in helping Australians along their retirement journey, and in helping them achieve their retirement goals.”
Key findings of the report showed that when seeking help with their retirement goals, Australians were most inclined to turn to a financial planner (33 per cent) or their super fund (25 per cent) for assistance.
According to Choi, individuals with a super balance less than $100,000 were just as likely to seek help in achieving their retirement goals from planners, as they were to seek help from their super fund. However, he said it was a different story for people with a super balance greater than $100,000, where financial planners were “significantly” more preferred.
Further analysis of the ‘Retirement Income Report’ showed there were three distinct segments of retirees:
- Active retirees, who are in good health;
- Semi-active individuals, who enjoy decent health but may require a little assistance; and
- Dependent retirees, defined as those individuals in poor health requiring assistance.
“The needs and wants of each segment are distinct. For instance, active retirees are most likely to be worried about the adequacy of their retirement savings, while the key need for dependent retirees is information about the financial considerations of aged care,” said Choi.
“While age is an obvious driver of the lifestyles represented by these segments, it is not the only contributing factor. A key insight from this research is the need for advice providers and product manufacturers to be more bespoke in their service and product design to cater for the lifestyle characteristics of their retiree clients.”
The eighth edition of the ‘Retirement Income Report’ provides an analysis of Australian adults and their attitudes towards retirement and post-retirement issues. This report is based on a large-scale survey of 7,305 Australians over the age of 40, and was conducted between September and October 2017.