Superannuation funds will need to play a significant role in helping Australians better engage on the topic of aged care and its costs, according to analysis from Investment Trends.
While coverage of the Investment Trends 2016 Retirement Income Report focused on Australians’ growing financial unpreparedness for retirement, the research also pointed to a significant shortfall in people’s understanding of aged care.
The report found that the need for aged care and the amount of funds required to cover the cost of aged care had the potential to take many Australians by surprise, with fewer than one in five having contemplated the issue.
“Australians typically do not begin thinking about or planning for their aged care needs until after retirement,” Investment Trends senior analyst, King Loong Choi said.
“But for many, this may end up being too late for them to make arrangements for potential aged care costs.”
Choi pointed to the fact that only one in three Australians say they either have, or intend to seek more information on aged care, most often planning to turn to Government services or medical professionals for such information.
“As an industry, we must address Australians’ lack of engagement on the topic of aged care and better prepare them for potential aged care needs,” Choi said. “This will require further action from super funds, financial advisers and product providers. The Government and medical professionals also have a role to play in growing Australians’ awareness of the financial aspect of aged care, particularly in light of our aging population.”