Australians are urged to enquire about retirement planning. (Credit: Victoria University/Getty)
Australians are being urged to ask themselves some simple questions about their superannuation and retirement plans as new statistics reveal a new trend that shows a “worrying” number of Australians have never spoken to anyone about what they want to do after they leave the workforce for good.
The Association of Superannuation Funds of Australia (ASFA) has released new research showing that 49% of Australian adults and almost 40% of those over 65 have never enquired about retirement. ASFA CEO Mary Delahunty says the figures should be a wake-up call.
“It’s alarming to see such a lack of interest in retirement information,” she said.
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“This means that many Australians could end up in a worse position in retirement than they should be, simply because they haven’t received the right guidance.”
“This research highlights the need for urgent reforms to ensure all Australian workers have easy access to high-quality, low-cost advice through their super funds.”
A recent Finder survey also revealed that only one in 10 people know how their super fund has performed over the past 12 months.
Finder personal finance expert Sarah Megginson said Australians needed to pay more attention to their super.
“The more committed you are to saving for retirement, the better off you will generally be,” she explained. “Choosing a high-performing super fund over an underperforming one can make a big difference to your retirement savings.”
Where can I get information about retirement?
There are many sources of information out there, some of which carry inherent risks, ASFA said.
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Professional services such as financial advisors are one of the most popular sources of information across Australia, with 21% of people seeking retirement advice this way.
Friends and family were also popular (21%), followed by online calculators and online resources (15%), super fund advisers (12%), reading the news (8%) and social media (6%).
ASFA data found that people ages 18 to 34 are 15 times more likely to look for retirement information on social media than people ages 65 and older.
Not all retirement advice is created equal
However, the association urged caution about taking advice from social media.
Delahunty said it was good that young people were learning more about retirement, but “their reliance on social media is worrying”.
“As an industry, we have seen numerous examples of high-pressure marketing tactics, including targeting account holders through social media, and ASIC has recognised this as a growing concern,” she said.
“Most scams begin with an interaction on platforms such as Reddit, TikTok or X. Younger people are particularly vulnerable to cybercrime and exploitation as they personally trust social media advice and are increasingly likely to seek advice there, threatening their pension balances and ultimately their ability to live comfortably in retirement.”
The industry needs reform
ASFA data shows that trust in professional retirement plan services is high.
But Mr Delahunty is “concerned” that such services are being underused, particularly among older people.
“This discrepancy suggests there are significant barriers preventing Australians from getting the advice they need,” she said.
“People trust financial advisers as a source of information, but the problem is that their services are so expensive that they are inaccessible to the average Australian worker.
“Unfortunately, these are the very people who most need quality financial advice to improve their retirement lives.”
According to Advisor Ratings, the average cost of a financial advisor in Australia is at least $3,500, with the average cost coming in closer to $5,000 per year for comprehensive, ongoing advice alone.
ASFA wants the retirement income sector to bring forward the second stage of reforms to deliver better financial outcomes, which emerged from a government-led review of the quality of advice two years ago.
“The Advice on Super Bill will reduce bureaucracy and improve the efficiency of receiving advice. This will be a revolutionary step towards ensuring Australians have access to trusted advice and improve their financial wellbeing in retirement,” Mr Delahunty added.
The government has committed to completing the second round of recommendations by the end of 2024.
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