Nearly a third, or 31 per cent, of Australians aged 55 and older have taken no action to prepare for retirement, according to the second edition of the TAL “What I Wish I Knew About Retirement” study.
The research also found 31 per cent of pre-retirees don’t know their options for accessing their super, and 22 per cent don’t know what they’ll do with their super at retirement.
Further it revealed another 31 per cent of this cohort do not know how to go about accessing the age pension and 21 per cent don’t understand their age pension eligibility.
These results were recorded despite nearly three quarters of pre-retirees and retirees participating in the survey describing themselves as being either ‘engaged’ or ‘very engaged’.
“People care deeply about their financial futures and they’re paying attention – but we don’t see that in the actions they’re taking to plan for this critical life stage. Many feel they don’t have all the information they need,” TAL general manager retirement and wealth Shaun Bransdon, said.
The analysis confirmed cost of living pressures are impacting pre-retirees’ expectations of retirement as well with only 29 per cent of respondents indicating they have money left over for saving or investing and 48 per cent expecting to have less spending power in retirement.
In addition the report noted an increase in the percentage of those over 55 who now expect to work longer, rising to 36 per cent from 27 per cent in 2024. However, the study showed people are often forced to retire before they expect with 61 per cent of retirees surveyed leaving the workforce before 65.
“If you’re planning to work until 67 but have to leave at 62, you’ve lost five years of contributions at peak earning capacity. For many, that’s significant,” Bransdon acknowledged.
TAL provided insight as to how retirees derived their income during this stage of their lives Here most of this group chose pension accounts or lifetime income products, or 90 per cent, were satisfied with their decision. That compared to 66 per cent who withdrew lump sums and 81 per cent who left their super in accumulation.
“Retirement income strategies work best when flexibility is combined with certainty. And our research shows this is increasingly important to people. Account-based pensions provide growth potential and capital access for active years, while lifetime income streams support spending confidence and can reduce age pension reliance,” Brandson explained.
“Without certainty about future income, even retirees with adequate savings may default to conservative spending. Product design can help – giving people confidence to enjoy their retirement while knowing their essential needs are covered,” he concluded.
The TAL study consisted of an online quantitative study of 2000 Australians aged 55 or over, comprising 873 pre-retirees and 1127 individuals who have already begun their retirement.
