Older investors flattend by double cost front
Older Australians have been hit financially on a double front with rising retirement costs and the impact of the global financial crisis which has taken 25% or more off the wealth of one in every two self-funded retirees.
A study released by researchers CoreData, showed that working lives were being extended and plans made to save in attempts to overcome the loss of elderly wealth from the crisis.
CoreData partner, Craig Phillips, said that “the downside of Australia having high proportions of direct share owners is that the slump in the sharemarket brought on by the global financial crisis has caught out many people at or nearing retirement.
“With limited or no time to recoup the losses many older Australians are now facing scaled-down retirements or extended working lives”.
“Two years ago many self-funded retirees were sitting pretty as they approached a new phase of their lives post-retirement. Shares were at all-time highs and life ahead was looking rosy. The problem faced by many is that they are still invested in the market and with this their investments have gone backwards”.
Mr Phillips said that “an alarming one in ten of all self-funded retirees have lost more than half of their invested wealth over the past two years while 2.2% of the total sample lost all of their invested capital.
“A particularly interesting statistic from the study was that more than seven out of ten self-funded pre and post-retirees – arguably those with more understanding of general investment concepts than the average Australian – had not withdrawn the majority of their invested assets from the market over the past four years”.
