A majority of Australians (66 per cent) feel unprepared for retirement
· Only 15 per cent believe they are very well of fairly well prepared for retirement
· Those who use finance professionals are over three times more likely to feel prepared for retirement
New research from MLC reveals that a majority of Australians feel unprepared for retirement, but engaging the services of a financial professional significantly increases the confidence of Australians in their ability to fund their own retirement.
The final part of MLC’s three-part whitepaper, Australia Today, found that only 15 per cent of Australians feel confident about their retirement nest egg.
However, the survey of over 2,000 people also revealed that Australians who seek professional financial advice are significantly more likely (35 per cent) to feel prepared for retirement – with only 27 per cent believing they’ll need the government pension, compared to 49 per cent of those who don’t employ an adviser or planner.
Executive General Manager, Wealth Advice, Greg Miller, said that despite the fact that Australia has an incredibly strong superannuation and retirement system, too many Australians are uncertain about their retirement savings.
“This research shows that regardless of age and income – the majority of Australians are feeling unprepared for retirement,” Mr Miller said.
“The constant political tinkering of the super system has also confused the conversation, and we run the risk of Australians becoming ambivalent to planning for retirement due to this confusion.
“Advisers regularly experience this uncertainty in super first-hand among their clients. If we can get policy certainty around super, advisers will be better able to help more Australians understand the value of super and saving for their retirement.”
Executive General Manager, Superannuation and Investment Platforms, Paul Carter, says that more needs to be done as a nation to help the situation.
“We need to help Australians equip themselves with the knowledge and information they need to progress on their paths to a self-funded retirement.
“By doing so, we not only improve our quality of life but also reduce the budgetary burden of an ageing population for future generations.”
The NAB-owned wealth management provider today called for Australia’s political leaders to redouble their efforts to establish clear, measurable and adequacy-based objectives for our superannuation system to help save retirement.
“We applaud the major political parties for their commitment to legislate the objectives of super,” Mr Carter said.
“However, those objectives must be clear, measurable and robust to ensure they target an adequate replacement income in retirement to mitigate generational inequity and gaps in living standards as well as costly and destabilising interventions into the future.
“Superannuation has been the subject of political whims for too long. The end result has been constant tinkering, or significant unanticipated change, which has left Australians feeling uncertain about their retirement.”
The three-part Australia Today whitepaper was commissioned by MLC to explore the challenge of how to get more Australians to think about their retirement, and to better inform the debate around superannuation. The research provides a fresh look at Aussies’ attitudes and perceptions towards their financial security and standard of living, and how they expect to live in retirement
Other findings from part three of the research include:
· Millennials are feeling the pinch, with those aged 25-29 significantly more likely to feel unprepared (79 per cent)
· More than half of those with investment properties or shares felt better prepared for retirement, compared to only 15% of those with none of these assets
· Unsurprisingly, women were significantly more likely to feel unprepared (74 per cent compared to 57 per cent of men)
· Of those currently retired, 57 per cent of women fear that they will outlive their retirement savings, compared to only 32 per cent of men
· Australians are beginning to top up their retirement savings and even consolidate their super:
o 29 per cent made additional contributions to their super funds in the last 12 months
o 27 per cent consolidated their super in the last 12 months. Interestingly, consolidation was more common amongst younger people (35 per cent amongst those aged 25-29)
· Despite increasing awareness about the importance of super, it’s still not at the top of the priority list for most Australians. If gifted $50,000, most participants would opt to spend the money on other things such as mortgage, savings or going on a holiday.
About the Australia Today whitepaper: MLC commissioned IPSOS to prepare a three-part whitepaper to explore the challenge of how to get more Australians to think about their retirement. Over 2,000 Australians participated in the research, which aims to provide a fresh look at attitudes and perceptions towards their financial security and standard of living in the future, and how they expect to live in retirement.
Australia Today White paper – Part 1
