Australians are among the world’s most worried about retirement
Australians worry more about their retirements than almost all the citizens of 16 countries, fearing they will be unable to afford a comfortable lifestyle, according to a new survey.
But despite these worries, they are less likely to take an active interest in managing their financial affairs than their overseas counterparts.
This conflicting sense of fear and apathy was highlighted in the latest Future of Retirement Report from HSBC, entitled Shifting Sands. The report surveyed over 18,000 people in 16 countries around the world, comparing the perceptions of retirement funding among millennials, Generation X and Baby Boomers.
It found that only 21 per cent of Australians (the second lowest in the report) believed that they would be able to afford a comfortable lifestyle in retirement, compared to 41 per cent of respondents in the US and 69 per cent in India.
Australians were also the third most concerned about the rising cost of healthcare in retirement (30 per cent), behind Hong Kong residents (46 per cent) and Singaporeans (50 per cent).
Meanwhile, constant changes to superannuation rules mean 43 per cent of working age people believed their retirement plan won’t be applicable by the time they retire. Nearly one third (32 per cent) have not started saving for retirement.
In light of this, 51 per cent of working age people say they will continue working to some extent in retirement with 68 per cent willing to defer retirement for two years or more and 34 per cent saying the would work longer or get a second job to boost retirement savings.
Despite their retirement fears, Australians were the least active at managing their retirement savings. Only 38 per cent of Australian Baby Boomers had sought information or advice on retirement funding, significantly lower than the global average of 50 per cent.
Millennials were the most pro-active Australian generation, with 50 per cent having sought information, compared to only 39 per cent of Generation X.
Working age Australians are the third least likely to actively move money to increase retirement returns (32 per cent). This compared to working age people in China (79 per cent) and Indonesia (64 per cent). Gen X Australians are also more risk averse than their counterparts internationally, with only 17 per cent willing to take investment risks to ensure financial stability, compare with 33 of their cohort globally.
“Our research also showed Australians are not taking advantage of the many resources available online for managing their retirement. Only a quarter of working age people surveyed had researched options online, compared to 35% globally,” continues Ellis.
“Thinking about retirement can be daunting, but there are simple tactics you can employ to proactively manage your retirement which could help to alleviate those fears,” says Scott Ellis, Head of Wealth, HSBC Australia.
Australians surveyed worried that their government would not have the ability to care for them in retirement due to rising debt and an ageing population.
The global low interest rate environment is making people more pessimistic. Some 44 per cent of working age people think low interest rates will mean they will need to work for longer (compared to the global average of 50 per cent), while 36 per cent say they need interest rates to rise if they are to save enough to be comfortable in retirement.
Despite bipartisan political commitments to protect Medicare, future health costs were a worry for many people. Among working age people, 75 per cent believed that retirees will have to spend more on healthcare costs in the future, and 66 per cent were concerned about being able to fund their health care.
These worries mean that 30 per cent of working age people worry about the availability and affordability of healthcare compared to global average of 25 per cent.
