Australians still need better retirement planning

Most Australians are still not paying adequate attention to their superannuation and retirement until they are nearly in their 50s.

New research conducted by Roy Morgan Research has confirmed what many financial planners already know.

 

And, according to Roy Morgan Research industry communications director, Norman Morris, financial planning has an important role in overcoming the problem.

The research found that, up to 21 years, most people (more than 70 per cent) feel that retirement is too far away to plan for, but that this improves a great deal by around 22 to 24 years, by which time 56.7 per cent think that retirement is too far away.

However, the research analysis suggested it was a potential problem that just under a third (31.4 per cent) of 35 to 39 year olds still believed they were too far from retirement to plan and that in the critical pre-retirement years of 50 to 54, 16.6 per cent considered that retirement was too far away to bother about planning.

Morris suggested the superannuation industry and the government had roles to play to make people aware of the benefits of financial planning, such as creating a more stable set of conditions and rules for superannuation that will improve confidence in being able to plan for the long-term.

"Frequent changes or speculation of changes to the rules governing superannuation do not instill confidence in what for most people is a 40-plus year time frame. There is also a need to improve people's understanding of superannuation: from its terminology, adequacy and advantages, to its fees and financial advice," he said.

"Currently there is uncertainty regarding what the government is likely to do regarding rule changes for the taxation of superannuation. Factor in the volatile share market and the complex terminology used in superannuation, and this makes long-term financial planning for individuals a rather precarious occupation," Morris said.

 

By Mike Taylor
21 January 2016
moneymanagement.com.au

  • The real value of advice

    The right words of advice - whether it be from friends or family, business mentor, sports coach - can have lasting impact on the way we lead our lives, manage our businesses. The same holds true for financial advice.

  • Taking a deeper dive into indexation of the transfer balance cap

    With the recent indexation of the general transfer balance cap causing discussion around its complexities, technical experts take a deeper look into what will happen on 1 July.

  • ASIC sounds warning around high-yield bond scams

    The corporate regulator has warned of a rise in scammers targeting Australian investors by pretending to be associated with well-known domestic and international financial service firms.

  • How to pass the diversification test

    Diversification, spreading your money across a range of different assets rather than putting it all into one place, is one of the core principles of investment risk management. That's because investment returns from different assets are never consistent.

IT Financial Services, ABN 48 097 884 976, is an Authorised Representative of Apogee Financial Planning. Apogee Financial Planning Limited ABN 28 056 426 932 is an Australian Financial Services Licensee and has its registered office at 105 - 153 Miller Street North Sydney NSW 2060. A member of the National group of companies.