65% of retirees are worried about their retirement income
Most Australian retirees are now worried about their retirement income (65%), according to new research from investment management firm Challenger.
A quarter of retirees surveyed in May have cut back on basic grocery costs and 37% are minimising clothing and accessory spending as an immediate response to financial uncertainty caused by COVID-19.
While many are making day-to-day changes in their essential spending habits, Challenger’s chief executive of distribution, product and marketing Angela Murphy said fewer Australians are looking at long-term solutions.
“This survey showed only a third of respondents have sought help for their finances, and of those, only 1 in 5 went to a professional financial adviser during this time,” she said.
“We know from our previous research in this area that when people feel overwhelmed by their financial situation they tend to stagnate because they find the choices too complex or they simply don’t know how to take the first step.”
The best money moves to make right now will differ depending on your circumstances and life stage, but the following steps are a great place to start:
- Use free financial counselling services
- Set and stick to a budget
- Haggle down household expenses
- Understand super and make it work for you
What’s the retirement landscape in Australia?
The most recent Australian Bureau of Statistics (ABS) data recorded 3.9 million retirees across the country who, on average, retired at 55.
While most people considering retirement expect to leave the workforce a decade later than this, there’s still a potential 20 years of retirement to fund when considering the average Australian life expectancy (80 for males and 85 for females). So, how are we financing this?
Government pensions remain the main source of income for retirees across the board, but in the world of superannuation there’s substantial discrepancy between genders. In 2018-2019, super was the main source of income for 30% of men, compared to only 17% of women.
Moreover, 36% of retired women relied on their partner’s income to meet living costs during retirement, compared to 7% of retired men. Women were also four times more likely than men to have left their last job to care for an ill, disabled or elderly person.
Concerned about your personal finances in the wake of COVID-19? Keep up to date on the latest economic movements with Mozo’s coronavirus financial relief and management guide.