Australians are becoming increasingly gloomy about their retirement prospects, with many believing that the flow-on impact of COVID-19 will mean they will have to work longer, new research has found.
Forty-five per cent of Australians are either scared or do not feel financially confident about retiring, while 23 per cent of Australians aged 30-65 say they will be forced to delay retirement due to COVID-19, according to research from Colonial First State.
“The coronavirus pandemic has significantly changed the world, not only socially but financially, too. These are extremely challenging times for many people,” said CFS general manager for product Kelly Power.
“It has been a big [wake-up] call for those Australians in their prime working age regarding their employment, savings, expenses, investments and super, and many have been forced to get a better grasp of their finances.”
The report found that older Australians over 55 are more confident they can still retire as planned, while those aged between 35-49 are more sceptical and financially underprepared.
“Younger Australians who still have time before retirement are feeling more anxious about retiring than their older counterparts because they’re still building up their savings pool while the reality of retirement costs start sinking in,” Ms Power told concerned Australians.
Women have also been hit harder than men, with a third saying they do not feel confident about retiring as they have been able to save less during the pandemic.
However, women are more willing to reduce spending compared with men (53 per cent versus 46 per cent) once this is over.
“Women would benefit from further initiatives and incentives to make additional contributions to super to ensure they have adequate retirement savings,” she said.
“Specific measures include mandating super contributions on paid parental leave and removing the $450 per month threshold for superannuation to be paid. This will also improve the retirement savings adequacy for low-income earners and casual participants in the workforce who often hold multiple jobs, many of whom are women.
“As an industry, this is something that is concerning for us, and we need to do everything we can to support women impacted by coronavirus, help them protect their wealth and rebuild as the economy recovers.”
However, one positive from the pandemic is that people are engaging more with their superannuation and retirement prospects, with an additional 16 per cent of Australians checking on their super balances since the pandemic, on top of the 42 per cent that already check frequently.
“The good news is there are some simple ways to rebuild your nest egg and boost your retirement income, and we’re already seeing some Australians starting to tackle this. Our research found that many of us are willing to make sacrifices to get back on track, reducing spending and keeping a closer eye on our budgets, which is a positive sign,” Ms Power concluded.
We can assist you to determine what will work best for you and start planning for the lifestyle you want in retirement amidst COVID-19. You may wish to speak to us by booking an appointment or by booking a time for a chat at this link.
Article reproduced from Nest Egg by Cameron Micallef