Despite the proximity to retirement age, over 50s lack sufficient knowledge of key retirement concepts, according to research from AMP.
The firm’s ‘Retire with confidence guide’ revealed somewhat of a cognitive dissonance in the results – three quarters stated they had not sought advice for retirement planning, but roughly 60 per cent said they wished they started planning for retirement earlier in life.
AMP chief economist Shane Oliver tells Professional Planner this was likely a hindsight reflection where older Australians wish they knew certain information earlier on.
“It’s the typical stage in life theme; when you’re young you don’t worry about it so much because it’s a long way off,” Oliver says.
“When you’re in your 40s [you’re thinking] it’s at least 25 years away so there’s plenty of time to think about it, but trouble is that it creeps up and you find a situation where you could’ve allocated a bit of money in a tax advantaged way to superannuation, but you didn’t do it.”
|For Australians aged 50 and over the research found:
|3 in 4 find the retirement system complex
|2 in 5 don’t know if they’ll be eligible for aged-pension benefits
|7 in 10 don’t know what an account-based pension is
|3 in 4 have not sought financial advice for retirement planning
|3 in 5 wish they’d started planning for retirement earlier in life
|3 in 5 are ‘extremely concerned’ about the rising cost of living
Oliver says the amount of over 50s not feeling prepared for retirement or not having financial literacy regarding key concepts is a surprise given the proximity of that age group to retirement.
“We were thinking that people, once they hit 50 would be more literate in terms of retirement,” Oliver says.
“It’s understandable that younger people are less focused on it… but by the time you get to 50 it’s coming up, it’s just over the horizon,” Oliver says.
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