Worried Australians fear they will outlive their retirement savings and many regret not putting more money away, a new report has found.
National Seniors partnered with the investment management firm Challenger to ask participants in the 2018 National Seniors Social Survey some questions regarding their savings and investments, concerns about outliving savings and willingness to invest in the share market.
The Feeling Financially Comfortable report surveyed more than 5,000 Australians aged 50 and over during the past 14 months and found that 53% worry they will outlive their retirement savings.
The report also found:
28 per cent regret not contributing more money to retirement
- 31 per cent said contributing more was not an option
- Worrying about outliving savings and investments was more likely for women, for those in poorer health and with less savings; and
- A disconnect was evident in some respondents’ low tolerance of loss but continued investment of savings in the market.
Who had most peace of mind and a sense of security? Well, those with defined benefit schemes.
It should be noted that financial comfort is relative to personal values and is not simply defined by a dollar value.
Other key ‘financial comfort’ themes that emerged included the importance of living within one’s means, accommodating changed circumstances, and having ‘enough to last’ by preserving capital.
Expectations that expenses decrease with aging were challenged by increased care needs and expenses later in life. There was a strong focus on the view that aged care costs are a future problem for individuals and the nation.
National Seniors CEO, Professor John McCallum said there has been a number of changes impacting retirees' financial situation that gives them cause for concern.
"The governments in the past 10 years have been making people feel insecure with constant budgetary changes," he said.
"There's changes in super, pension means test and the franking credit changes have been floated and it makes people feel very insecure."