A small increase in the level of superannuation contributions can improve how consumers view their prospects in retirement, according to new research conducted by Investment Trends around attitudes towards retirement and post-retirement issues.
The research firm, which has just released the tenth edition of its “Retirement Income Report”, found less than half of working Australians over the age of 40 felt prepared for retirement, however, even small additional contributions to superannuation shifted that view.
The report, based on a survey of 5210 Australians over the age of 40 and conducted between September and October 2019, found only 47 per cent believed they were prepared for retirement.
The key driver behind that view from those surveyed was a belief they did not voluntarily contribute enough into their superannuation, with only a quarter of non-retirees stating they believed they were contributing enough to retire comfortably.
Investment Trends senior analyst King Loong Choi said the difference in superannuation contribution levels between those who fear being unable to retire comfortably and those who are positive about their prospects was very small and did not require large levels of contributions.
“Australians who believe they will live comfortably in retirement typically contribute 11 per cent of their annual household income into their super fund, meaning that an additional contribution of 1.5 per per annum above the super guarantee level contributes significantly to their peace of mind,” Choi said.
“Even among lower-income households, a slight increase in super contribution levels corresponds with greater confidence in retirement outcomes,” he added, noting super funds should continue to promote the idea that a small rise in super contributions can make a significant difference.
He also pointed out that while only 40 per cent of survey respondents had searched for retirement-related information in 2019, only half that number had found what they needed.
“Currently, super funds are the most frequent point of contact for those seeking information on retirement, but with only half saying their information needs were sufficiently met, there is room to improve both the accessibility and relevance of content,” he said.
“It is crucial that relevant retirement information is easy to find as those who successfully find the information they need are highly likely to take further action – almost 90 per cent of them. And the actions these people take are important ones, most often preparing a will, seeking financial advice and making voluntary super contributions.”