A recent study has revealed Australians who have high confidence in their retirement plans are more likely to take a proactive approach to planning for it and seeking financial advice is a crucial aspect of this process.
The “How Australia Retires” report published by Vanguard Investments Australia found individuals who have sought professional financial advice demonstrate a much higher probability of having a well-defined retirement strategy and felt significantly more confident in funding their retirements.
Of those who have received professional financial advice, 44 per cent reported feeling ‘extremely or very confident’ in their retirement planning and just over half had detailed plans to finance their retirements. Additionally, those who use a financial adviser are more likely to engage with their super fund.
Conversely, the study noted almost two-thirds of working-age Australians have not consulted professional financial advice for their retirement planning. Among those who did not seek advice, just 25 per cent expressed high confidence in financing their retirement and 26 per cent had a detailed plan to do so.
According to Vanguard Australia managing director Daniel Shrimski, a well-thought-out plan and consulting with superannuation funds are essential factors for achieving a successful and worry-free retirement.
“One of the key findings in this report is that having a plan is one of the most effective ways to not only achieve a successful retirement, but to alleviate the emotional burdens and anxieties that Australians can feel towards retiring,” Shrimski noted.
“The study also provides evidence that Australians display low engagement and understanding when it comes to superannuation, with half not knowing how much they pay in annual fees and one in four not knowing what their current superannuation balance is.
“An opportunity, and perhaps a need, therefore exists for the superannuation industry on the whole to improve member engagement, to simplify fee structures and to support stronger retirement outcomes.”
Vanguard head of super Shannon Nutter agreed that a comprehensive retirement plan can yield advantages beyond just financial gains.
“Good financial advice can improve more than just investment returns; it can also provide value in the form of financial peace of mind and behavioural coaching to help investors understand their goals and stay on track to achieve them – regardless of what might be happening in the markets,” Nutter told selfmanagedsuper.