Many Australian retirees are managing their retirement finances themselves, with the majority of them choosing not to access advice from financial planners and advisers, a recent survey has revealed.
According to the “Franklin Templeton Retirement Income Strategies and Expectations Survey” conducted in May, only 24 per cent of retired Australians are working with a financial adviser, compared to 57 per cent of retirees in Canada and 47 per cent of retirees in the United States who have opted to involve professionals in the management of their retirement finances.
Despite this, 45 per cent of the 435 Australian retirees surveyed still believed a financial adviser was important to their retirement planning and generating income in retirement.
Franklin Templeton head of retail Manuel Damianakis noted it was encouraging to see people taking an interest in their personal finances, but warned the independent approach adopted by many retirees might not be best for everyone.
“Eighty-one per cent of those retired have never developed a written retirement income plan and only 43 per cent told us they have a strategy to generate income for retirement that could last 30 years or more,” Damianakis said.
The survey revealed that while there was strong interest among retirees for working on their retirement finances independently, only 53 per cent of retirees checked on their retirement savings monthly or more often.
Around one-third of those surveyed also said they did not have a strategy for spending their retirement savings or a back-up plan in the event of them not being able to manage their finances.
“Given ongoing market volatility and protracted low interest rates, it would be unwise for retirees to adopt a set-and-forget approach to their savings and investments and this is often where those working without professional advice become unstuck,” Damianakis said.
“As an industry and as a society, we need to navigate a better path where all retirees can access professional advice and still feel they have sufficient self-management and control.”
Earlier this month a major investment manager said traditional cash investments were no longer suitable for retirees and an ETF provider stated a risk-free retirement was no longer possible.
