Alleviating retirement anxiety

For many Australians, the dream of retirement is, increasingly, an anxious one. What might surprise you, however, is that, despite the fear of running out and the importance many Australians place on financial security and independence, an overwhelming number of them are putting off thinking about and planning for their retirement.

To better understand the scope of the problem, its causes, and to identify some ways we might be able support our financial advisers to alleviate them, we commissioned a survey, asking 2000 Australians from 20 through to 65 and over about their attitudes to financial confidence, superannuation and planning for retirement.

What we found was that, for the vast majority of them, financial independence was to some degree considered important.

44% of respondents over 50 said that financial independence was very important with 43% saying, whilst it was important it was not the ‘be all and end all’. For Australians under 40, 42% said financial independence was very important to them.

Despite this, many Australians seemed unsure they’d be able to achieve it.

44% of respondents over 50 said they don’t feel confident about their financial security in retirement, while for respondents under 40, the same was true for 51% of them.

It’s not just the rising cost of living and the global uncertainty causing this anxiety, however. There’s another cause, a lack of preparedness, with many of the people we spoke to expressing regret that they hadn’t started thinking about how they’d fund their retirement sooner.

According to our survey, 26% of Australians over 50, and 40% of those under 50, said that they wished they’d started thinking about retirement in their 20s.

40% of respondents over 50 said that they’d only started thinking about retirement in their 50s, while 26% of them had started thinking about it in their 40s, a further 11% admitted to not having started thinking about retirement at all.

For respondents under 50, only 25% had already started thinking about retirement at all.

Looking at these statistics, it’s easy to see why many Australians are anxious about the idea of retirement.

Fortunately, Innovative Retirement Income Streams (IRIS), make it relatively easy for advisers to address most, if not all, of these concerns, alleviating retirement anxiety and helping Australians to start thinking about their retirement much earlier.

Offering the potential for higher rates of income for life, IRIS have been purpose built to remove the fear of running out, to ensure retirees aren’t living unnecessarily frugally and are able to enjoy their retirement.

And, because there aren’t any minimum age requirements for an IRIS, advisers can start conversations with their clients earlier, meaning they can work with them for life.

Other benefits, such as concessional means testing when calculating Age Pension eligibility, is another impressive drawcard, speaking to another key finding coming out of our research.

While the majority of Australians over 50 (75%), believe the Age Pension doesn’t provide sufficient support for retirees, more than half of them, (53%), said it was very important in their overall retirement plan, with almost half (47%) saying their reliance on the Age Pension affected their confidence in achieving their retirement goals.

So, while retirement might always be seen by some as the great unknown, and will always carry with it, a certain amount of anxiety as a result, with the right advice, preparation and products, you can help your clients feel more confident about, and excited for, their retirement.

Our IRIS offering, MyNorth Lifetime, has been specifically designed to help you achieve this for your clients, our suite of three accounts are designed to take your clients from super through to pension, showcasing your value, giving them confidence and helping them achieve the type of retirement they’ve always dreamed of.

Find out more about North, the leaders in retirement innovation.