Fears of another Global Financial Crisis still affect the way many over 50s invest their retirement funds, a new report has shown.
Nearly 46 per cent said they were concerned they could be hit by another major fall in financial markets, according to a report by National Seniors Australia and Challenger.
The report compiled by the National Seniors Productive Ageing Centre and titled Outlook for Australian seniors’ retirement plans? Mostly sunny, with possible late rain showed seniors had concerns and were more cautious with their investments than they were before the GFC.
The report also found only a bullish 2.4 per cent believe the GFC was a historical ‘blip’ and continue to invest all their retirement savings in the market for long term growth.
“It’s understandable those who’ve lost their life savings in the share market slump should be wary of investing in shares again but it’s also concerning that many people also don’t have a plan for their financial future,” National Seniors chief executive Michael O’Neill said.
“While many people believe they will be alright financially, one in five also expects to rely on Medicare and the government to provide for their health and aged care needs.”
The report, which was based on about 2,000 survey responses, revealed that whilst most over 50s were resigned to share market volatility, 39 per cent said they have no specific plan for expenses later in life.
Less than half said they were currently using a financial adviser and two out of five were not using a formal budget to manage their household expenses.
“But this report also puts to bed the widely-held notion that many Australians who are retired – or who are about to retire - are profligate with their super and want to take it as a lump sum and spend it fast on non-essentials,” O’Neill said.
“Instead, the goal for 78 per cent of people is to provide income for the rest of their lives – and many draw down on their super as conservatively as the rules allow.
“Most people look forward to their retirement but being prepared for future health and lifestyle needs will help them enjoy it a lot more.”