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Boomers' retirement expectations defy reality
A new super survey has found that Australian baby boomers' expectations about retirement fall short of the reality of their situation.
According to a REST Industry Super white paper, 35 per cent of pre-retiree baby boomers were completely financially unprepared for retirement. A further 51 per cent were somewhat prepared, and only 14 per cent were confident about entering retirement.
Half of the survey's respondents were confident they knew how much they would need in retirement, while 42 per cent said they would be able to fund a comfortable retirement.
But the research found that, on average, retirement income was greatly under-estimated when compared to Association of Superannuation Funds of Australia (ASFA) figures.
Funding a comfortable retirement was respondents' main concern: however, almost half believed they would not have to give up anything due to finances.
REST Industry Super chief executive Damien Hill said some were hoping for the best, while others were bogged down in the psychological trauma of entering a new life-stage.
"There are certainly those with their head in the sand, and a significant portion hoping for the best.
"I think some are better prepared financially but I think many are trying to work their way through what retirement will mean for them psychologically," he said.
Only 30 per cent of people had sought formal financial advice relating to their retirement, with 30 per cent opting to handle their own affairs.
"This [baby boomers] is the group that you think would be most engaged - and yet the level of detachment that we've demonstrated in the survey means that some are still a way away from engaging in the conversation," Hill said.
He said the challenge for the Government and the financial services sector was to provide targeted education and access to financial advice.
He said the next step was in pushing an industry-wide conversation about retirement incomes, including regulatory change to make way for new retirement income products and introducing retirement income disclosure.
"The longer it takes to engage people in the conversation, the less flexibility on what can be done," he said.
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