The most recent research performed by Challenger into the attitudes of Australian seniors has shown inflation is, for the first time in a decade, posing a significant concern for this cohort in funding their retirement.
“What we’ve seen this year, and it’s the first time we’ve seen it since running the surveys back to 2013, is that the inflation number has all of a sudden had a much bigger increase with those [seniors] who think it’s very important,” Challenger head of retirement income Aaron Minney told attendees of a recent webinar he co-hosted.
The study for 2023 has revealed inflation is almost of as much concern to seniors as more conventional aspects of retirement such as medical and aged-care costs and regular income to cover essential expenses.
“What that tells me is that retirees at the moment are very worried about inflation in a decade where it really hasn’t been an issue,” Minney noted.
“So from a planning point of view you may have had conversations with a client where this hasn’t come up for a while and has been on the back burner as nothing to worry about, but now they’re reading the paper, they’re seeing the news, they’re saying: ‘Oh my god, how am I going to cope with the cost of living, what can you do to help me?’”
According to Minney, historically wage inflation has more or less kept up with actual inflation, but reminded practitioners this will be of no comfort to retirees.
“When you’ve got clients who are retired and no longer have a wage or salary that’s going to increase with inflation, they start to wonder: ‘How on earth do I get my [income to] increase [to counter inflation]?’” he said.
He pointed out this is an area where practitioners can strengthen their advice proposition as retirees are bound to be looking for solutions to ease their fears over inflation.
