AUSTRALIA - Australians are failing to forward plan for their retirement and lack knowledge of the options available to them, a report by the Australian Securities and Investments Commission (ASIC) has found.
The research “Consumer decision making at retirement” involved 10 focus groups among people who have retired from full time employment in the last 12 months, and who have decided what they will do with their super benefit. Only those who had a super benefit of AUS$50,000 or more were included.
“Whilst many people retire early, a high proportion of all people who retire from full time employment conduct a very small amount of pre-planning for retirement, including very little financial planning specifically for retirement,” the report concluded.
“Most retirees only became aware of the two options (lump sum or an allocated pension) at, or after they had retired from full time employment.
“Very few people completely understood the key attributes of the main options open to people with regard to their superannuation benefits at retirement, a number of people had a very poor understanding of all options, and a minority failed to appreciate that different approaches, products and indeed a mix of approaches and products may have been optimal for them.”
The report, conducted by Chant Link & Associates on behalf of ASIC, sought to understand the decision processes undertaken, and to identify awareness and knowledge of the main options available to retirees when deciding what to do with their superannuation benefit.
Findings also revealed that while most people felt it was good to have superannuation, a number had reservations about putting all of their assets in super driven by perceptions of poor returns, fees and charges and a general lack of awareness.
Meanwhile, the International Monetary Fund (IMF) has commended Australia’s “ambitious agenda of reforms” to raise productivity and labour force participation in response to the ageing population, however has called for further broad based reforms in these areas.
The IMF said the implementation of the government’s reform agenda “would move Australia to the forefront of defining international best practice in the area of structural policies to address the economic implications of ageing, as it is now in the area of macroeconomic policies”.