Australians are feeling better prepared for retirement: Investment Trends 2017 Retirement Income Report

Leading research firm Investment Trends has released its latest Retirement Income Report, an in-depth study of Australians’ attitudes towards retirement and post-retirement issues.

The report is based on a large-scale survey of 7,305 Australians over the age of 40 concluded in October 2017. This year’s study highlights a number of important trends:

Key highlights from the Investment Trends 2017 Retirement Income Report:

• Australians are feeling better prepared for retirement, though this vital life stage remains a concern for many
• Super funds and financial planners are key players in helping Australians reach their retirement goals
• Retirees fall into three distinct lifestyle segments, each with their own post-retirement support needs

Australians are feeling better prepared for retirement, though this vital life stage remains a concern for many

Australians’ sense of preparedness for their retirement improved slightly over the last 12 months. The latest research from Investment Trends reveals that 46% of Australians over the age of 40 feel prepared for their retirement, up from 44% in 2016.

“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.

Despite this improving sentiment, retirement remains a concern for many Australians, with only one in four believing 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.”

Super funds and financial planners are key players in helping Australians reach their retirement goals

When seeking help with their retirement goals, Australians are most inclined to turn to a financial planner (33% cited this) or their super fund (25%) for assistance. “Opportunities abound for both financial planners and super funds given the level of interest shown by Australians for further assistance,” said Choi.

“Right now, individuals with a super balance less than $100k are just as likely to seek help in achieving their retirement goals from planners as they are to seek help from their super fund,” said Choi. “However, the story is different among those with a super balance greater than $100k, where financial planners are significantly more preferred.”

Retirees fall into three distinct lifestyle segments, each with their own post-retirement support needs

The Retirement Income Report takes a deep dive into the retiree market from the perspective of their self-assessed quality of life. Three distinct segments arose from the research: Active retirees are those in good health; semi-active individuals are in decent health but may require a little assistance; and dependent retirees are those 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,” explained 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,” added Choi.