National research carried out by the Australian Securities and Investments Commission (ASIC) has shown that many pre-retirees are worried that they won’t have enough money in retirement, report low financial literacy and have low confidence in managing their retirement finances.
ASIC commissioned research that surveyed 2,065 Australians aged 45–75 to understand retirement planning and any readiness gaps. Focusing on the 50–66 age group, covering a range of retirement stages including respondents with retirement over 10 years away, nearing retirement (within nine years), and fully retired, the research showed that 48% of respondents were worried they’d run out of money in retirement; 32% felt they were already behind in retirement planning; and only 18% had a clear retirement plan in place.
Only a third of the pre-retirees in the age group felt confident that they would be financially comfortable in retirement, with female pre-retirees and renters in particular reporting low confidence in their ability to manage their finances or live comfortably in retirement.
Financial literacy and low confidence in managing retirement income was also a concern for 46% of the age group. Nearly 60% reported that they wanted to learn more about super and retirement.
In response, ASIC has developed practical tools, calculators and guidance to support financial literacy and retirement planning in a new Retirement Hub on Moneysmart. The launch offers a great opportunity to review your understanding before seeking advice about what will suit your circumstances.
The resources are available in segments reflecting the key questions uncovered in the research:
- How much will I need? – covers retirement costs, retiring with debt, planning retirement goals and lifestyle and working out your living expenses.
- How can I make my money last? – budgeting, understanding different sources of income (eg super, Age Pension, account-based pensions or annuities), government benefits and how to decide what to do with your super.
- How do I stay on track? – how to check and keep track of your super and insurance, tackle debt, and stay aware of scams.
An upgraded Retirement Planner is designed to walk you through where your super is at, project how much income you could have in retirement, work out how much you’ll need based on your goals or lifestyle choices, and allow you to review your options and test different scenarios to assess if you’re on track to reach your financial goals.
