Retirement
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
Retirement
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in others.
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in others.
The TAL and Investment Trends 2023 Retirement Income Report, after surveying over 10,600 participants aged 40 and older, has uncovered a notable shift: for the first time in almost a decade, more retirees believe their savings will outlast them after they cease working—35 percent having this conviction compared to the 33 percent who worry about outliving their funds.
This buoyancy comes despite economic headwinds, with 60 percent of Aussie retirees stating they're living comfortably, marking an improvement from the previous year. Ashton Jones from TAL underscores the positive impact of super funds, which "are increasingly lifting the bar to better support members in retirement." He points out that educating members about transitioning from accumulating to drawing down super in retirement can "improve member confidence and outcomes," a move aligned with the Retirement Income Covenant's expectations.
Conversely, insights from the 2023 MFS Global Defined Contribution Survey, incorporating feedback from 1,000 super fund members, depict a more sobering picture. Here, the narrative is flipped, with the majority indicating that inflation has forced them to re-evaluate their retirement savings plan, necessitating extended work life or casting doubt on retiring altogether.
Joshua Barton from MFS Investment Management highlighted these findings, stating, “While the loss of retirement confidence in Australia is in line with global peers, it highlights the role that effective advice can play in helping investors meet their retirement objectives." He emphasized the need for accessible financial advice, especially in an evolving landscape where the sector transitions from savings accumulation to income drawdown.
The MFS study also pinpointed a desire for personal touch in financial advisement, with one in three desiring interaction with an adviser through in-person or video meetings. Barton added, "This is particularly important as the industry readies for superannuation’s historic transition... We must embrace the regulatory and legislative relief changes geared towards delivering better financial outcomes that can help insulate retirees, current and future, from market cycle stress.”
The two contrasting reviews consequently signal a crossroads for Australians facing retirement, with optimism and uncertainty coexisting as they navigate the turbulent financial terrain ahead.
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