Australians’ financial wellbeing boosted in retirement
Retirement has a positive effect on Australians' sense of financial wellbeing despite their financial position, according to a paper from the Department of Families, Housing, Community Services and Indigenous Affairs (FAHCSIA).
The paper, ‘Responses to financial stress at life transition points', found age was associated with financial wellbeing even among 65-year-old recipients who received welfare.
Although planned retirement could be a positive experience, it lessened for those whose retirement was forced on them and its timing unexpected.
It said full-time employment had the largest effect on the various indicators of financial wellbeing.
Conversely, being fired or made redundant did not appear to have as much impact as supposed. While short-term involuntary churning of jobs had little effect, a loss that stretched into the unforeseeable future acted negatively.
The report said although life events such as retirement had positive effects on a recipient's perspective of their financial position, becoming a single parent or separating from a spouse had the opposite effect.
Job loss combined with other factors such as paying off a mortgage was a cause of wellbeing downgrades, it said.
Although changing jobs, receiving a promotion and moving house had positive impacts on a number of financial wellbeing indicators, other important life events seemingly had no effect at all, FAHCSIA said.
A new birth or pregnancy had little effect on recipients' financial wellbeing, and neither did getting married.
People who reported major improvements in their financial situation over the previous 12 months also reported higher levels of financial wellbeing and lower incidence of financial stress events.
The reverse was true of people who reported a worsening financial situation over the past year.
Marginal increases in welfare payments would do little to change the poor financial wellbeing and instances of financial deprivation of those living on welfare, the report said.
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