The top concerns retirees have about their super – and how to fix them
The top concerns retirees have about their super – and how to fix them
The federal government has called for submissions about how to fix superannuation in the retirement phase. I asked older Australians what they think about the big issues, and how we should fix them.
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I hope everyone is having a great long weekend. Today’s email is a simple one focussed on my newspaper article in today’s paper. In addition to that, I’m adding a new section - featuring your letters. Each week I get some crackers and I think you’ll enjoy hearing people’s stories as much as I do.
This week’s column featured in The Age, The Sydney Morning Herald, Brisbane Times & WA Today.
Letters from the Epic Retirement Community
The Prime Time podcast: Catch up!
Enjoy the last days of the holidays!
Many thanks! Bec Wilson
Author, podcast host, columnist, retirement educator, and guest speaker
The top concerns retirees have about their super – and how to fix them
Each weekend I write a column in both the print and digital editions of The Age, The Sydney Morning Herald, Brisbane Times and WA Today money section. This article was first published here.
The federal government has called for feedback through a discussion paper focused on the retirement phase of superannuation. They are actively seeking insights from the super industry regarding retirement, and the deadline for submissions is approaching next week.
I seized the opportunity to tap into the perspectives of everyday Australians approaching or currently experiencing retirement. The aim was to gauge their sense of support during this phase and identify areas where improvements could be made.
The government and the superannuation industry knows they have a decent-sized problem. There’s at least four big challenges to tackle in the years to come. And they’re all interwoven – you can’t tackle one if you don’t tackle the others.
The insight into what average Australians facing retirement right now are seeing and feeling might just make this feel a bit more real to all of us.
Problem one: Why aren’t people accessing their superannuation in retirement?
There are 4.3 million people in retirement right now in Australia, yet only 1.3 million people have converted their superannuation funds into retirement phase. This poses a critical question: why aren’t people accessing their superannuation?
A survey sent out via my newsletter revealed that 47 per cent of respondents had a mediocre or worse understanding of superannuation, with 35 per cent admitting they didn’t grasp the intricacies of the retirement phase.
It’s up to the government and the retirement sector to work together to ensure a more secure and supported retirement for all Australians.
The ways they perceive they can learn about it are limited, with only 7 per cent participating in online workshops and 16 per cent accessing calculators on super fund websites. Only 24 per cent had read books or newsletters on retirement, one of the few ways to learn right now outside the fractured world of financial advice.
The appetite for education is evident, with more than half expressing a desire for courses, workshops, and masterclasses. The challenge lies in making these resources available to the people who need them, with 43 per cent suggesting the government should fund them, and 40 per cent believing superannuation funds should provide them for free.
Problem two: Convincing people to seek financial advice and making it accessible
There is a real challenge convincing people to seek financial advice and making it accessible. Almost 39 per cent of those asked received no form of advice, while 40 per cent sought personal advice from either their super fund or an independent financial advisor, and a quarter only sought general advice from their super fund.
To tackle these numbers, we have to address two issues. First we have to overcome the scarcity of advisors in Australia that makes it expensive – which seems to be under way. Then we have to tackle the brand problem.
It’s been called “wealth advice” for far too long, placing it out of the reach of the average Australian. It is perceived to be only valuable to the wealthy. But that’s just not the case.
People with average superannuation balances of $150,000 to $250,000 can benefit enormously from learning how to drive compound investment, and how to execute a strategy carefully to draw income from Centrelink, superannuation, and potentially some work in retirement.
Problem three: There is no ability for people in retirement phase to benchmark their superannuation funds.
There has been an enormous focus on building transparency in superannuation funds that are in accumulation phase, serving the 16 million people who have an accumulation phase account rather well.
But within the next five years, there will be more than 5 million people considered retired and able to transfer to a retirement phase account, and they are almost completely in the dark on being able to compare, or even analyse the returns their fund is achieving and the costs they are incurring.
In fact, 76 per cent of people didn’t even realise that there was no public benchmarking similar to the YourSuper program used to monitor accumulation funds. And more than 64 per cent of respondents were confident that creating benchmarking is an important priority for the government and super funds.
Problem four: The fear of running out of money
Finally, we’re all living longer, and that is a significant concern. A whopping 42 per cent of respondents admitted they really feared running out of money before they die. Another 22 per cent are unsure of whether their money will last.
There’s more. Read the rest of this article on The Age, The Sydney Morning Herald, Brisbane TImes and WA Today - here.
Dear Bec
I am really enjoying your emails, podcasts and of course your book.
I am 65 and still working full time after going back to work only 20 years ago after raising my family.
My husband is retiring from 43 years teaching this week but has been on extended leave and carers leave for his mum soon if 2023. But he has secured a position 2 days a week at a school closer to home and it is a perfect fit for him. He is also doing philanthropic work for a Christian school in Zambia training the teachers and mentoring the leadership.
All this has rejuvenated him.
I could really resonate with Jim Kilkennys podcast. I love all the topics you cover on those and can listen to them anytime. Keep them coming!
One other thing I wanted to share is that I was using your last email to get ready for our financial planners meeting this week. It really got me thinking about the item related to health. I really learned from my mum, who lived till she was 97, about what not to do!
So I advocate keeping up regular health screenings...ie visit the dentist, get your mammograms, eye checks, skin checks (I've had 2 melanomas already) pap smears, bowel screening, blood tests for everything like blood sugars and cholesterol, podiatrist appointments and I use my extras health cover for remedial massages etc.
Lots of my friends aren't doing these. It's a no brainer for looking after your health, not just exercise and eating as we age but keeping on top everything. Perhaps a good idea for a podcast!
I gave my husband your book last Christmas (2023) and he has been reading it to me and finally is more knowledgeable about things rather than leaving it all to me!
We have referred your emails to our friends and given them copies of your book as a birthday present. So thank you for what you do. Have a great year!
Heather
[Thanks Heather, what a beautiful email and a great tipoff for a podcast idea. I really love that you are taking your sense of purpose and your health seriously and keen to see your friends do the same. I also love that you are gave the book to your husband and are enjoying him reading it aloud. My husband and I read ‘What to expect when you are expecting’ aloud to each other before we went through the lifechanging time of having our first baby 21 years ago! Your story brought it all back and how incredibly effective it was to share the lessons! Excellent tip! Hopefully it inspires others here - cheers Bec]
Have you got a letter you’d like to send in? Email me at bec@epicretirement.com.au.
This week the Prime Time podcast is having a breather, with Season 1 now finished, and Season 2 firmly in production. Last week, the podcast landed on Apple Podcasts’ top 200 list, getting to #126! We’re pretty excited.
The podcast has blown us all away with more than 50,000 downloads so far. So thanks to everyone who has spread the word, or had a listen. And thanks to our terrific guests. You can see all the episodes here and pick one to start you off. There’s so many doozies!
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Have a lovely Sunday!
