Australians unprepared for retirement

Posted 24 July, 2017

Source: Money Management 

Half of Australians approaching retirement aged 45 to 65 said they have not started planning or are not proactive about preparing for retirement despite 85 per cent being uncomfortable with their current financial situation.

Those were the findings of research by Australian Unity, which also found that while the majority of Australians felt they did not have enough saved for retirement, they were avoiding planning for retirement altogether.

Australian Unity Wealth chief executive, David Bryant said: “Worryingly, the data shows more than three-quarters of 45 to 64 year olds are running blind. They’re neglecting to get advice, not proactive about planning and a good majority have no idea about the recent government changes”.

Meanwhile, most older Australians would turn to superannuation funds for information about retirement, ahead of financial advisers, partners, other family, or Government sources.

The ‘Australian Unity Empirica Retirement Planning Research’ study of 1,000 respondents found among pre-retirees aged 45 to 64 years, 77 per cent said they had not begun formally planning their retirement, as did 47 per cent of 65 to 84 year olds.

The study found 58 per cent of pre-retirees would need to rely on the Age Pension for their retirement as they would have insufficient funds in their super.

The study also found only 30 per cent of pre-retirees said they were making extra contributions to their superannuation (despite assuming on average that 52 per cent of their post-retirement income would come from super), while 47 per cent of pre-retirees said they held no investments apart from their super. Almost half (44 per cent) of pre-retirees said they were not proactive when it came to their retirement.

The most pertinent pieces of advice retirees had for those planning their retirement was to find a trustworthy financial planner early on or to ensure avoiding untrustworthy financial advisers altogether.

They also recommended ensuring debt was paid off as much as possible (mortgages, credit cards), and reviewing spending patterns to ensure income was not unnecessarily wasted.