30-49 year olds most concerned about planning for retirement: MLC

In a break with tradition, young people are taking a more active interest in their superannuation with the 30-49 year old group being the most concerned about planning for retirement, according to the latest quarterly MLC Wealth Sentiment Survey.

Both men and women in this age group rated their concern about having adequate funds for retirement at 73%, with people over 50 and 18-29 year olds having an equal level of concern (64%).

The survey of over 2,000 Australians also revealed Queenslanders were most concerned about super adequacy, missing investment opportunities and changes to superannuation rules. People from Western Australia and Tasmania were the least concerned.

Those who have children are more concerned about having enough for retirement compared to those who don’t have children. The more children the family has, the more concerns there are.

In a special report: MLC Retirement Survey also released yesterday, just one in 10 respondents had a well considered plan in the event of major financial setbacks such as unemployment or ill health, with 72% of people failing to consider setbacks in their retirement plans, up 3% from the previous quarter.

Investors continue to take a conservative approach to risk with superannuation, paying down debts and cash the preferred investment options.

Key highlights:

• Women continue to be the most concerned about finances, with 62% of women fearing they will have insufficient funds at retirement compared to 55% of men
• Males hold more diversified portfolios across asset classes, particularly shares
• 11.3% of Western Australians expect to have more than enough money to retire on, compared to 4% for the rest of the population
• Queenslanders feel the least prepared with over 50% having far from enough money at retirement
• Over the next three months, SA/NT and TAS residents have the strongest intention to divest shares and bonds while investing more into super

MLC General Manager Lara Bourguignon said: “Many people don’t start thinking about superannuation until their 50s but these survey results indicate there may be a step change in the age people starting planning retirement.

“We’re delighted to see superannuation starting to hit a nerve with the younger 30-49 year old group and hopefully this concern leads to greater action.

“Most Australians are inadequately prepared for retirement, which is why we recently launched the Let’s Save Retirement campaign to educate and encourage Australians to take control of their financial futures,” she said.

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One third of Australians expect a financial shortfall at retirement: MLC.

Almost one third (31.7%) of Australians expect a large financial shortfall at retirement with a further 25% expecting a shortfall to some extent, according to a special report: MLC Retirement Survey.

Alarmingly only 3.5% of Australians expect to have more than enough money to maintain their lifestyles in retirement.

The survey of 2,000 Australians also found nearly 70% of respondents failed to consider major financial setbacks such as a major illness or unemployment in their retirement plans, with only 8.5% having a well-considered plan for major setbacks.

The level of concern was also evident in the MLC Quarterly Australian Wealth Sentiment Survey which found deposits and paying off debt continues to be the top investment priorities. Additionally, interest in superannuation and direct shares increased over the December quarter.

Despite the cautious outlook for the economy, respondents reported a growing appetite for direct shares particularly from those earning $75,000 to $100,000 per annum.

Key highlights:

• The top three barriers to sufficient retirement savings continue to be major health issues, loss of employment and lack of formal investment plan.
• Women are the biggest worriers when it comes to superannuation with inadequate funds for retirement, losing money, fees and inflation their biggest fears. Over one third of women (36%) indicate they’ll have far from enough money at retirement.
• Men are more optimistic when it comes to their financial situation at retirement with over one third (37.4%) expecting to have enough or more than enough to retire.
• Men aged 18-29 were the most relaxed about their financial situation at retirement.
• Queensland residents gave the least consideration to major setbacks in their retirement plans.
• Western Australian residents have the strongest intention to divest shares, bonds, balanced funds and invest more in superannuation. WA respondents were also the most concerned about retirement risk especially missing investment opportunities.

“It’s encouraging to see Australians thinking more about superannuation but as the survey suggests, there’s still not nearly enough being invested for retirement. Over 56% of respondents expect to have at least some or a major shortfall at retirement,” NAB Wealth Group Executive Andrew Hagger said.

“Wealth is the result of hard work, good decisions and good advice, and MLC strongly believes in the difference advice can make to someone’s life.

“Australians wanting to take control and get active in their retirement savings should seek financial advice to get the help they need to reach their goals,” Mr Hagger said.

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