National Seniors Australia and investment management firm, Challenger Limited, have released a joint report on older Australians’ retirement income worries.
Titled Retirement income worry: Who worries and why?, here are some key findings from the report.
Having a source of income that will last for life is one of the highest priorities for older Australians.
“Australia has one of the best pension systems in the world, yet Australian retirees are still showing high levels of worry that they will outlive their savings,” says National Seniors CEO, Professor John McCallum.
The report also cited the ABC Australia Talks survey, which showed that concern about retirement income was the second major worry after climate change, among all participants.
The report offers the following potential solutions to reduce older Australians’ worries about outliving their savings:
- having access to clear professional financial advice
- improving retirees’ financial literacy
- undertaking better financial planning and saving earlier in life for retirement.
An increase in present day budget pressures, discretionary spending, casual employment and working in the gig economy have all contributed to the worries of those who aren’t yet retired.
There is an urgent need for better financial products to support retirement planning, and more access to advice from those who are qualified in assisting older Australians.
Substantial changes to the Age Pension, means test thresholds and taper rates contribute to this statistic.
National Seniors will continue to advocate for improvements to the retirement income system, including the Age Pension. We want the government to stabilise the system, which has faced constant change, or the threat of change, for over a decade.
It’s not just women’s longer life expectancies contributing to this statistic.
Gender inequality in lifetime earnings and savings potential, as well as gender role expectations, means that women have accumulated more unpaid work and less superannuation than men.
Action is needed at all stages of the life journey to address gender inequity in retirement security.
This includes improving financial literacy, offering more support and advice to those phasing out of the workforce, and continuing to address gender inequities in the workplace in order to build up a higher buffer of retirement savings throughout the working life.
As the superannuation system matures, this statistic should improve.
In the meantime, potential solutions include a standardised approach to superannuation education and tailored programs that target those most at risk of retiring without sufficient funds.