Australians are becoming increasingly concerned about their retirement prospects as living costs continue to rise, with only 28 per cent saying they feel prepared for their golden years. It’s at the lowest level in a decade, dropping sharply from 38 per cent last year, new research found.
But according to Brighter Super’s annual Retirement Outlook Index, pre-retirees who sought professional financial advice were almost twice as likely to feel prepared (43 per cent) as opposed to those navigating it themselves (22 per cent).
That was the case for 77-year-old Lois Moir. She went from feeling “unprepared, uninformed and ignorant” about what would happen once she left the workforce about a decade ago to “much more ready” after seeking out professional advice, she told Yahoo Finance.
“It’s also increased my super balance way above and beyond what I could have done just with my own knowledge,” she said.
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Moir first sought out financial advice around eight years before she retired, when she was in her late 50s.
“Retirement still felt like it was a fair bit away in the distance,” she recalled.
But she’d realised understanding her superannuation was something she was “just no good at”.
For many Aussies, picturing what retirement will actually cost is becoming much harder, especially as everyday costs keep rising, said Brighter Super’s Julian Cappe.
More than half of Australian workers expect their retirement income will not be able to cover their expected living costs, forcing them into tough decisions as their working life winds down.
“For 54 per cent of pre-retirees facing that income gap, they are faced with having to accept a more modest retirement or a later retirement,” Cappe said.
In Moir’s case, attending seminars of the two different superannuation funds she was with in her late 50s was the “lightbulb” that helped her realise that ongoing advice would make a big difference to securing her the balance — and the retirement lifestyle — she was seeking.
“As I got closer to retirement, I felt more confident that I had adequate resources for a reasonably comfortable retirement,” she explained.
“The financial cost of getting advice was paid back 100 times over.”
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Feeling unprepared for retirement is beginning at younger and younger ages, with 28-year-old Jack Kerry already feeling like retirement is out of reach. · Supplied Millions more in the bank
Moir said she knows her superannuation balance “substantially increased” thanks to the advice she received in the lead-up to her retirement, as she was able to make “more informed decisions” about her investments.
And she didn’t even have to make voluntary contributions: the increase in her balance came from picking the right investment options and staying consistent despite market fluctuations, Moir said.
The now 77-year-old can’t recall the exact figure of her superannuation balance prior to the advice, but, according to the modelling from UniSuper, Australians who receive ongoing financial advice throughout their working lives could retire with up to $970,000 more in super than those who never do.
And for those receiving advice throughout retirement, the difference in money available to spend could reach $1.19 million, the modelling report found.
There are key factors that can impact super growth, UniSuper found, with picking investment options for your specific circumstances seeing an additional $340,000 at retirement, and staying strong when markets fluctuate bringing in an extra $510,000 – the two main changes that Moir made.
“It’s amazing…” she said. “I recommend financial advice to all of my friends, whether they are still heading into retirement or even if they are already retired.
“It’s given me so much confidence that I’ve got what I need.”
with AAP
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