Failure to plan retirement
The high number of Australians approaching retirement, who have little or no plans for their retirement, is a worrying sign, according to a report released last week. The National Seniors Australia report investigated the retirement planning strategies of 1,820 pre-retirees from different population subgroups.
The high number of Australians approaching retirement, who have little or no plans for their retirement, is a worrying sign, according to a report released last week.
The National Seniors Australia report titled, What Next? Workforce Transitions and Retirement Planning Among Australian Pre-Retirees, investigated the retirement planning strategies of 1,820 pre-retirees from different population subgroups with respect to financial, lifestyle, and health planning.
Overall, 60% of respondents made only one or no plans across the domains (that is, across financial, health and lifestyle priorities), while only 14% made four or five plans.
About 62% of pre-retirees reported having plans in place for their finances, which was far more commonplace than planning for health (24% to 27%), or lifestyle priorities (17% to 26%) in retirement.
“This suggests when it comes to retirement planning, outside of the financial domain, not many people are making plans for their lifestyle priorities and health,” National Seniors chief executive, Michael O’Neill, said.
Those on low incomes, who had not finished high school and are aged in their 50s, were reportedly significantly less likely to have made plans across these domains.
“The nature of how older workers transition out of the workforce and plan for their retirement has significant economic and social implications for Australia,” Mr O’Neill said.
“These people will have a significantly longer post-employment life due to rising life expectancies.
“This poses a substantial challenge for financial planning to ensure the adequacy of retirement incomes.
“There needs to be more attention on this issue and the government needs to intervene with policies that address the reality that many people are not planning for their retirement.”
Key findings of the report include:
• The average age Australians in their 50s intend to retire is below the present eligibility age of the Age Pension of 65 years.
• The most common reason given for when to retire is related to financial wellbeing (34% of pre-retirees), followed by health wellbeing (26%) and access to the Age Pension (11%).
• The main expected source of income at retirement is superannuation (53%), followed by the pension (30%).
A new report by National Seniors, expected to be released later this year, will aim to uncover the reasons why some people plan for retirement and others do not.
