Baby boomers overlook financial planners
Almost two thirds of baby boomers do not have financial plans or have a financial planner with nine out of 10 confident of their own financial knowledge according to a survey conducted by research group Newspoll.
The survey, titled Retire Ready and commissioned by the Commonwealth Bank, also found 60 per cent of respondents are aware of their total superannuation assets, with the same percentage intending to supplement their superannuation or the government pension with another form of investment.
However, while many Australians are taking responsibility for funding their retirement, the survey also found that 78 per cent of pre-retirees are not aware of exactly how much retirement income they will receive.
The same number admitting to knowing little or nothing about the types and styles of investments in their superannuation and 15 per cent of those surveyed also intend to work full-time after the age of 65.
According to CBA Mortgage and Investment Services executive general manager Geoff Austin, the survey clearly demonstrates not enough people are putting their financial knowledge into action.
“With such a large percentage of the Australian population about to reach retirement, the financial knowledge gap and lack of action revealed in the Retire Ready survey really are critical issues for our society.
“Pre-retirees can fund a comfortable retirement, but they need to have a clear understanding of their financial position, set and achieve saving goals, diversify their investment portfolio and take ownership of their financial future,” Austin says.
Despite 87 per cent of pre-retirees perceiving their financial knowledge as average or above average, the survey indicates there is still a need for education as almost half (46 per cent) of respondents do not know how much money they need to live comfortably in retirement, one in three pre-retirees believe property will always give the highest return, and 60 per cent incorrectly think that a balanced portfolio is comprised of equal amounts invested in cash and shares.
Adding to the financial literacy gap is procrastination with 56 per cent of respondents confessing to procrastinating when it comes to planning their finances for retirement and 25 per cent of these admitting to procrastinating for more than 10 years.
The survey was conducted by telephone over March and April 2004 and involved 634 respondents.
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