26 April 2024
AustralianSuper’s research into how people feel about retirement reveals that people aged over 50 are feeling more confident than in previous years about life after work. But it also identifies that women experience more anxiety about finances when it comes to retiring than men.
The award-winning Retirement Confidence Index (RCI)1, a study from AustralianSuper and Monash University, was the first of its kind. It examined how people think, feel and plan for life when they finish working.
From 2017-2022 we surveyed more than 8,000 people and the insights gained aim to help improve outcomes for Australians planning for or experiencing retirement.
The 4 factors of retirement confidence
Feeling confident in your retirement is about more than your super balance alone. Rather, the RCI considers 4 factors of retirement confidence including:
- financial awareness and skills
- retirement awareness and planning
- health and wellbeing, and
- social connectedness.
THE 4 KEY FACTORS TO RETIRING WITH CONFIDENCE
AustralianSuper’s Chief Officer of Retirement Shawn Blackmore says the research shows retirement is about much more than money.
‘Members tell us their number one concern is whether they have enough superannuation savings to retire,’ Mr Blackmore says.
‘However, the RCI clearly details that both your preparedness and happiness are much more complex than how much super you have.
‘Your mental and physical health combined with setting specific goals are more impactful than money alone. However, it’s also essential that you plan for the future and prepare financially.’
5 key findings from the 2022 Retirement Confidence Index
1. Retirement confidence has increased
The 2022 results are based on survey results from more than 3,000 participants. Australians’ retirement confidence gradually increased over the five years to 2022 for both men and women, from 63 points in 2018 to 66 points today (out of 100). Retirees also reported a higher confidence level of 67 points than pre-retirees, with 63 points.
In 2022, the average Retirement Confidence Index score for Australians aged 50 and over is 66 out of 100.
If you’d like to see how your score compares to the average Australian aged over 50, try our interactive quiz.
2. Women continue to score lower on confidence
In 2022, Australian women continued to be less confident about retirement than men, even though the report shows they have better budgeting and savings habits.
Women with dependents were more anxious about their retirement plans, and those aged under 60 said they should have started planning earlier.
‘While it’s pleasing to see retirement confidence increasing, the gender super gap is certainly an issue, and means the superannuation system is not equal for all,’ says Mr Blackmore.
‘A focus on this systemic issue is needed so women can achieve strong financial security in retirement.’
3. Levels of financial anxiety are higher in women
Women also reported higher levels of financial anxiety and significantly lower levels of financial literacy. Female pre-retirees and retirees who completed all six annual RCI surveys reported higher financial anxiety in 2022. By contrast, male pre-retirees and retirees reported lower financial anxiety in the latest research.
‘The higher your financial literacy, the lower your anxiety in relation to your finances, and the more likely you are to plan for retirement,’ says Dr Fernanda Mata, researcher with Monash University.
Read more: The future face of poverty is female
4. People feel more socially connected than in recent years
The RCI study has found that maintaining an active social life can directly affect retirement confidence. The 2022 results found that women and those who were married or in a de facto relationship were more socially connected.
In addition, participants felt more socially connected in 2022 compared to recent years, with a score of 70.5 points out of 100.
5. A focus on planning and seeking financial advice
More than two-thirds of people aged between 50-69 wished they had started to think about their financial needs for retirement in their 40s, the findings identified.
The research also shows that Australians responded to the economic consequences of the COVID-19 pandemic and other global circumstances by seeking advice. The most common action was to speak with a financial adviser (36%), followed by increasing or building an emergency fund (27%).
‘Everyone’s retirement story is different, and it’s never too early or too late to think about life after you finish working,’ says Mr Blackmore.
‘Whether you’re in the early planning stages or are already retired, we offer members access to different types of advice to suit the level of help they’re looking for.’
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Show Transcript
When you're thinking about your retirement, money is just one factor to consider. In fact, there's a range of things to think about when planning for the next phase of your life, to make sure you live the retirement lifestyle you want.
The Retirement Confidence Index, carried out by AustralianSuper and Monash University, shows that how confident you feel about your retirement comes down to four factors. Your financial awareness and skills. well-being your physical health and mental well being. How socially connected you are to your family, friends and community. And the goals and plans you have in place for your retirement.
If you're thinking about retirement, or have already retired, consider how these four factors could guide your thinking. For example, the study shows that financial awareness improves as you approach retirement. So spending some time to understand your finances can help you feel better about the years to come.
People who also took time to improve their financial literacy, were found to be less anxious about the financial side of retirement. Looking after your physical and mental health can help you transition into your new lifestyle and stay positive. Being connected socially to friends, family and community is key to feeling confident. Your social circle is important. People who set goals and make future plans report higher levels of retirement satisfaction and find it easier to adjust to their new lives.
Take the time to consider these four factors and how they could help you feel confident about life after work.
End Transcript
Plan your retirement and feel confident
A little planning goes a long way when it comes to understanding your retirement needs.
Take some time to understand your finances and consider what you want from your retirement. The AustralianSuper team is here to help you get started.
References:
1. The RCI study won the
best award for research in ageing in 2018 at the 17th National Conference of
Emerging Researchers in Ageing.
2. Based on women aged 60 – 64, Deloitte Average Balances to 30 June 2022, rounded
to the nearest $100. People with zero superannuation are not included in
average data.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.