Fear over retirement savings prompts Australians to seek information
Concern over a shortfall in retirement income has prompted half of Australians over 40 to seek information in the past year, up almost 40% from a year ago, according to the MLC Investment Trends survey.
The MLC/Investment Trends December 2013 Retirement Income Report, based on a nation-wide survey of 5700 Australians aged over 40, revealed 78% plan to seek further information relating to their retirement over the coming year, up from 64% the previous year.
While those surveyed were more optimistic about investment markets compared to the previous study, two in five Australians over 40 were worried about outliving their retirement savings. The impact of inflation and not having enough for extras in retirement were also key concerns.
NAB General Manager of Retirement Solutions Andrew Barnett said, “Although Australia has had mandatory superannuation for over 20 years, we are only now starting to see an increased awareness of the risks that could prevent people having enough money to meet their retirement needs.
“However it’s one thing to identify the risks and another to know how to manage them, which is where access to quality financial advice is crucial.”
The research also showed the longer a client’s relationship with a financial adviser, the more comfortable they expected to be in retirement.
Just 15% of clients who had seen a financial adviser for less than one year expect to be comfortable in retirement, compared to 26% who had seen a financial adviser for more than five years.
The survey also asked participants to assess the existing retirement products in the market and identify any gaps.
Longevity protection was the single most important feature when selecting a retirement income product for 16% of those surveyed, followed by the ability to access funds throughout product life (10%) and guaranteed income payments (7%).
“The last few years has seen significant innovation in the Australian market regarding retirement products. The new suite of products can guarantee income for life, while providing flexibility to access capital when required.
“This transparency and flexibility provides an unmatched opportunity for Australians to invest for certainty and growth, so they can live the lifestyle they want in retirement,” said Mr Barnett.