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It is never too late to seek advice and most would benefit, survey says.
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Two-thirds short of funds for retirement: Findex
24 May 2023
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Three decades of compulsory superannuation has left two out of three people worried about being short of funds for retirement, according to a survey by Findex.
The top 10 accounting-advisory firm said the concern grew more acute the closer people were to retiring, with just 31 per cent of Millennials lacking confidence they had enough money but 38 per cent of Gen Xers and 52 per cent of Baby Boomers.
“This paints the picture that most Aussies have adopted a ‘kick it down the road’ mentality to retirement,” Findex Co-CEO Matt Games said. “But when the time eventually comes, they’re faced with the reality that their existing savings and superannuation balance are insufficient in this economic climate.”
According to the Association of Superannuation Funds of Australia, a retiree today needs upwards of $500,000 in super – much more the early-60s national average of $356,000 for men and $288,000 for women.
The Findex research also revealed half the participants believed they lacked the financial literacy to assess what was needed for a comfortable retirement, with women almost twice as likely as men to say their financial understanding was “poor”.
Four out of 10 respondents felt they would benefit from professional advice but only 37 per cent of men and 24 per cent of women had received it.
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“The time to access advice is now – especially when many are currently struggling to manage their finances,” said Mr Games. “What our financial modelling shows is it’s never too late for someone to benefit from advice, even if you’re less than 10 years away from retirement.”
“With the cost of living continuing to increase and Australians living longer, the reality for most people – particularly women – is not doing anything today will actually cost you. Most Aussies simply won’t have the funds they need to live a comfortable retirement if they don’t take a proactive approach to secure their financial future.”
The cost of advice was cited by 34 per cent as a reason for failing to seek it out, along with 32 per cent who felt they earned too little to make it worthwhile and 19 per cent who blamed procrastination.
Findex head of investment relations Matthew Swieconek said talking to financial advisers paid off and the benefits went beyond purely investment strategies.
“They provide behavioural coaching, asset allocation research and management and tax savvy planning – areas that DIY investors can often overlook and can add enormous value to wealth creation over time,” he said.
“Our projections demonstrate the value of advice where Aussies stand to gain 8 per cent to 29 per cent in benefits depending on the age they start.”
The survey found those who had sought financial advice for retirement were almost three times more likely to say they had a good understanding of what resources they would need.
The survey quizzed more than 1,000 participants aged 35–65 across metro and regional areas.
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