A study into attitudes toward retirement savings conducted last year has found the majority of Australians perceive their income in retirement will be generated from multiple sources and not just superannuation.
The State Street Global Advisors “Global Retirement Reality Report” showed only 25 per cent of Australian respondents viewed retirement income as primarily the drawdown of superannuation assets. By contrast, 51 per cent of participants living in Australia said their definition of retirement income is “a consistent income stream, like a pay cheque, that begins the day I retire”.
The research also indicated Australians give greater urgency to budgeting for their earlier years in retirement, with only 21 per cent of participants saying they were more concerned about budgeting for their later years.
State Street Global Advisors’ analysis of the results suggested one of the main pillars of the Australian retirement framework could be the reasoning behind this attitude.
“This could reflect the backstop of the age pension as well as a behavioural ‘present bias’. However, it could equally reflect an expectation that successful management of finances in the early retirement years is a prerequisite to financial soundness in later years,” the financial services firm said.
It was revealed longevity risk remains a significant concern in this country, with 31 per cent of those surveyed admitting outliving their savings was causing the most angst when planning their retirement finances. This cohort also revealed only 8 per cent were worried about not being able to leave a bequest – a finding State Street Global Advisors noted would be a welcome finding for policymakers.
With regard to the services provided by superannuation funds, the least popular option specified was further education. Financial advice was rated higher in importance, while the most sought after element was a good retirement income product.
The report was compiled from the results of a survey conducted by global analytics firm YouGov between 20 July and 22 August 2022. Responses from 3552 individuals were received covering Australia, the United States, the United Kingdom and Ireland.
A separate study released last week found the majority of Australians are in favour of having the objective of superannuation written into law.
