Running out of money, rising cost of living are top retirement concerns: new CSBA research

Sam Monteath

The latest CSBA FEAL Superannuation Experience & Engagement Benchmark with fresh attitudinal insights garnered from additional survey questions, has found that Running out of money was the top concern for 18% of members, increasing to 25% for those aged under 35.

Following close behind, Inflation and the rising cost of living, concerned 17% of members. However, for older members aged over 55, it was the top concern (22%).

For retired fund members, Inflation and the rising cost of living was their top retirement concern (24%), followed by Running out of money (16%), and Cost of health and aged care (14%).

The six monthly CSBA FEAL research surveyed 5,932 individual fund members from more than 100 Superannuation funds. Conducted in March 2024, the latest program included a range of new questions that expanded our exploration into member attitudes and behaviours around retirement.

Measuring member attitudes and behaviours

“Attitudinal and behavioural insights are critical if trustees are to make inroads into targeted member engagement, said CSBA CX Director of Finance, Sam Monteath.

“Demographic analysis is not enough. Funds must continue to innovate, to effectively engage with at-risk segments. And it starts with sound insights.”

Explaining the importance of introducing additional layers of understanding, Monteath said: “This latest research provides a more holistic view of member sentiment than ever before, across all member cohorts regardless of their level of fund contact.”

Retirement sentiment

New research found that while overall sentiment was evenly spread between positive and negative feelings, there were startling variations among cohorts.

Younger members aged under 55 were more negative about retirement (57%) than their older counterparts (36%). In fact, ‘Uncertain’ was the most common feeling selected by those under 55 (26%) compared to 22% of All members.

Female members were over three times more likely (7%) to feel ‘Overwhelmed’ than males (2%). Similarly, younger members aged below 55 (6%) compared to older members aged over 55 (2%).

On a positive note, ‘Hopeful’ was selected by 20% of members and ‘Secure’ was selected by 15% of members. However, ‘Hopeful’ was expressed by only 17% of older members over 55 and 16% of retired members, while ‘Secure’ was expressed by only 8% of younger members below 55. (24% for those aged over 55 and 35% among those retired).

Retirement confidence

The weakest cohorts were those in the middle age and pre-retirement groups, with 35 to 44-year-olds at 5.9 out of 10 and 45 to 54-year-olds at 5.8 out of 10; compared to 6.3 for All members.

The study also found significant differences between females (6.2) and males (6.6) and members with Default (6.1) and Custom investment mix (6.9).

Retirement priorities

The top three retirement priorities were Financial security, followed by Health and wellbeing, and Lifestyle goals.

Behavioural statements

Agreement with behavioural statements in the study was low. The statement ‘I am actively engaged with my super including investment mix, fees and insurance’ received the lowest score, with agreement at 3.3 out of 5. There was also no indication that older members aged over 55 were more actively engaged.

Start deep-diving now

As revealed in the APRA ASIC report on trustees which found alarming gaps in analysing, tracking and integrating strategies to meet members’ income needs in retirement, Monteath says much more needs to be done to empower members.

“Trustees must develop attitudinal and behavioural understanding at a granular level, to truly support members for the best possible retirement,” she said.

In this latest study, members indicated that the top three areas where they wanted improvement were: Better proactive communication; Pre-retirement plans; and Personalised information and advice.

Meanwhile, members named Clear guidance and advice; Retirement planning seminars; and Handy projection and modelling tools as the most helpful services to prepare for retirement.

“These new insights reveal how much more opportunity exists to better engage with members and support them earlier on the retirement journey,” said Monteath.