Financial Planning, Retirement

Super, advice reduce retirement income stress

retirement income stress

Superannuation savings and financial advice are have been identified as key drivers in reducing stress around retirement income adequacy.

The presence of superannuation income in retirement and the adoption of financial advice are two key drivers in reducing the level of stress related to outliving retirement income and savings, according to new research released by an advocacy group for people aged over 50.

The “Retirement Income Worry: Who worries and why?” report, released by National Seniors Australia and Challenger, found people currently retired and receiving some income from superannuation had fewer concerns and worried less about retirement savings than retirees without any super income.

The report, based on a survey of 3584 people aged over 50, found 39 per cent of those retired and with superannuation income were unconcerned about retirement savings compared to 27 per cent who were retired but not receiving any income from super.

This latter group was also the most likely to return to the issue of retirement income adequacy, with 23 per cent of the survey respondents stating they worried about the matter frequently.

National Seniors Australia noted many retirees without superannuation were likely to be on the full age pension, and 31 per cent of respondents who were receiving the pension stated they frequently worried about outliving their savings.

“The superannuation system is still not fully mature and most current retirees weren’t required to make superannuation contributions for a large part of their working career,” the report said.

“However, these results show that it is clear that superannuation is not only providing a reliable source of income in retirement, but it is also reducing financial worries for many retirees.”

Retirees with a defined benefit pension or lifetime annuity report the least stress about outliving their retirement income or savings, it added.

It also noted many of the respondents had sought some form of financial advice, with 60 per cent stating they had received advice in the past 12 months and 74 per cent saying they had received advice at some stage of their lives.

Despite receiving advice, survey respondents remained concerned about running out of money, but those who received advice were less likely to worry frequently about it and reported a positive impact where they had received advice outside of the past 12 months, including no concerns about outliving their savings.

“This could be an indicator that their previous advice had set them up or possibly that the advice had just confirmed that they were well placed for retirement,” the report stated, adding the positive outcomes for advice that had been recently received were dependent on whether it had been taken up.

“Most (86 per cent) of those getting advice had implemented it and more of this group (15 per cent) reported that they used to but now no longer worried.”

People who did not take up advice were more likely to worry frequently (25 per cent) and be worried in general (64 per cent), it noted.

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