The ‘concerning’ oversight that could cost you dearly in retirement

When it comes to ensuring you are set for retirement, preparation is key. However, alarming new research from the Association of Superannuation Funds of Australia (ASFA) has found that only 51 per cent of adult Australians, including around 60 per cent of those aged 65 and over, have sought guidance from any expert source on retirement planning

Given that obtaining high-quality information about superannuation and retirement can improve retirement incomes, ASFA CEO Mary Delahunty said, “It’s concerning to see such a lack of engagement with information about retirement”.

“It means many Australians may end up worse off than they should be in their post-working lives, simply because they haven’t been empowered with the relevant guidance,” she said.

“This research highlights the need for urgent reform to make high-quality, low-cost advice easily accessible to every Australian worker through their super funds.”

Although superannuation funds can provide valuable financial advice to retirees, ASFA discovered that they are significantly underutilised.

“Given the high degree of net trust in financial advisors and advisors from super funds, it’s concerning to see how low the use of these sources of advice are. This mismatch suggests that there are significant barriers preventing Australians from accessing the advice they need,” Delahunty said.

“Although people trust financial advisors as a source of information, the problem is that their services remain too expensive for the average working Australian to access. Sadly, these are the people most in need of quality financial advice to improve their retirement outcomes.”

In response to the findings, ASFA is urging the retirement sector to implement changes under the Delivering Better Financial Outcomes Reforms, aiming to make financial advice more accessible through super funds.

“The advice in super legislation will reduce red tape and improve the efficiency of accessing advice. It will be a revolutionary step for Australian’s access to trusted advice that will improve their financial wellbeing in retirement,” Delahunty said.

“Our research shows how critical these reforms are to ensure that our superannuation system remains the envy of the world, we will continue to work closely with Government and with other stakeholders to align the sector to progress these issues as a matter of priority.”

The importance of sound financial advice when it comes to ensuring you are ready for retirement came to the fore recently when ASFA revealed that the cost of maintaining a comfortable retirement has increased by 3.7 per cent over the last 12 months due to rising home and vehicle insurance premiums, along with higher private health insurance costs.

As a result of these financial pressures, retired couples now need $73,337 per year to enjoy a comfortable lifestyle, while singles require $52,085.

Delahunty explained that “retirees are managing an increasingly difficult landscape where the costs of essential goods and services keep rising”.

“Health, home, and transport are vital to their well-being, yet the expenses tied to these necessities are steadily increasing,” she noted.

As Australians approach retirement, it’s crucial to seek guidance and stay informed. Don’t wait—take charge of your retirement planning today.