Fear of running out of money plagues retirees

20 February 2018
| By Mike |
image
image
expand image

Many Australian retirees fear running out of money with the result that up to half of them are spending less than the age pension each year, according to the latest research from Milliman.

A Milliman report, released this week, confirmed other research pointing to the essential conservatism of Australian retirees when it comes to tapping their retirement savings and pointed to the need for greater understanding about why retirees are so fearful and what can be done about it.

It said running out of retirement savings represented a key concern for many people given that a 60-year-old man was now expected to live for a further 26.4 years and a 60-year-old woman for 29.1 years, according to the Government’s 2015 Intergenerational Report.

The Milliman report said this concern might be a driver for the substantial proportion of retirees with account-based pensions who draw down the minimum legislated annual amount.

The report analysis said the findings suggested that mandatory and voluntary measures to boost superannuation might not be enough to produce improved retirement lifestyles without a deeper understanding of the motivations driving retiree behaviour.

The Milliman analysis suggested superannuation funds should be seeking to obtain more information from their members about what might be driving their fears.

“What is certain is that more information is needed – something funds can obtain directly from their members,” the report said. “In this way, super funds’ general advice can be better aligned with the actual experience and needs of members.”

The said such an approach could be part of an important – and broader – conversation about the adequacy of older Australians’ living standards after a lifetime in the workforce.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago