What older Australians need from financial services in retirement.

Older Australians tell industry 'focus on retirement income’

By Jeremy Cooper

If you want to know what older Australians need from financial services in retirement, a great place to start is to ask them; preferably a large group of them.

That’s what motivated National Seniors Australia’s research on behaviour and attitudes to retirement finance in a survey of more than 5,500 people over 50 years of age.

The National Seniors report, released last month, provides compelling support for a greater focus on products that provide a regular stream of retirement income.

The thing that matters most to people about their retirement finances is having a constant stream of income to cover essential needs. It is the top priority for over-50s – 84% rated it very important.

So important is regular, constant income that almost a third of those already in retirement, said they would be prepared to accept a lower level of income provided it was stable.

Ensuring savings last throughout their lifetime is the second most important factor for older Australians, 77% rated it very important, while paying for aged care and medical costs came next at 71%.

Interestingly, leaving assets to the children rated lowest of the factors that matter about retirement finances. Seniors think they have supported the next generation enough.

As evidence of the seriousness with which older Australians approach retirement planning, the report also showed that six out of 10 are turning to financial advisers for reliable information and advice about retirement finances. This proportion is significantly higher than for the superannuation member population overall, where only one in five seek advice.

The sentiments of the National Seniors report shouldn’t be news to the financial services sector. After all, there’s widespread agreement that the retirement phase of super is the biggest strategic priority for the superannuation industry. However, there’s a lack of consensus on what this means in practice.

While consumer research has consistently shown that most superannuation members want regular income in retirement, the super industry has to date been focused on flexibility and the highest returns, rather than stable income for life.

That’s starting to change as progressive superannuation providers see the opportunity to better meet the needs of retirees with solutions that provide regular income alongside growth assets in retirement portfolios.

Across Australia, 160,000 households will move into retirement in the next 12 months. It’s worth listening to what they are telling the financial services sector about what is most important to them.

Jeremy Cooper is Chairman, Retirement Income at Challenger, and will be a guest speaker at the inaugural Financial Services Council Retirement Conference on Tuesday, 14 November. Register now

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