A study into attitudes toward retirement savings has found nearly two-thirds of non-retirees are unsure how to use retirement income products to finance their lifestyles after leaving the workforce.
The “2023 Retirement Income Report” prepared by life insurer TAL and industry research firm Investment Trends showed 65 per cent of respondents had no knowledge of the pension products offered by their current superannuation funds.
Additionally, of those surveyed who were aware of pension products, a majority lacked an understanding of the how they worked and what benefits they possessed. In contrast, just 21 per cent of more than 10,000 respondents knew about retirement income products and intended to use them.
Over a third of non-retired survey respondents also reported not knowing what they would do to make the best of their saved superannuation, with an additional third (34 per cent) suggesting they would consult a financial adviser to chart a plan to boost their income in retirement.
TAL growth, retirement and wealth partnerships general manager Ashton Jones said the survey, which was conducted in August, revealed a push among respondents for pension products that provided certainty and assurance of a consistent income.
“Over half of respondents say that income for life is a top consideration when selecting a retirement income product. This shows that members value holistic superannuation retirement propositions that provide them with the confidence of a regular income for as long as they and their partner live,” Jones said.
“In the past, the only way super fund members could get a guaranteed income for life was to take up a traditional annuity. By default they’d have to pay for inflation protection or investment protection as well.
“Now in the market we’re seeing options for members to get longevity protection without having to pay for this extra protection. We see this as a new product category that many super funds are calling ‘lifetime pensions’.”
Further, 60 per cent of those surveyed revealed they felt they could enjoy a comfortable retirement, with 35 per cent believing their superannuation savings would last until they died.
The findings come after a recent Association of Superannuation Funds of Australia report revealed increases in the cost of living had pushed the standard for a comfortable retirement to record highs.