Financial advice helps Australians retire with confidence: Report

Colonial First State (CFS) said its Rethinking Retirement Report 2024 highlights Australia’s changing perceptions of retirement and the role financial advice can play to increase confidence in retirement.

“Our research found that Australians who plan early, engage with their super and get advice have considerably greater certainty over when they retire, are more confident about their financial position and are more likely to enjoy their retirement,” CFS said.

“Greater access to affordable advice is essential to ensuring more Australians can enjoy the comfortable retirement of their choice.”

The report found more than three-quarters (77 per cent) of advised retiree respondents are currently enjoying their retirement, as opposed to just over half (52 per cent) of unadvised respondents.

Unadvised Australians were also twice as likely to find retirement harder than they expected, compared with advised respondents.

“Our 2023 Empowered Australian report found that advised Australians are more confident and significantly more positive about their financial position than unadvised Australians with the same net wealth and income,” CFS said.

“Building on those findings, we see the important role that advice continues to play in the lives of retirees.”

The need for retirement planning becomes more apparent as two in three respondents did not retire at a time of their choosing, rather were forced to by their circumstance or employer.

The report found the top reasons for Australians to retire were poor health or a partner’s health (35 per cent), followed by the personal choice to retire (33 per cent), and redundancy (11 per cent).

Further highlighting the importance of advice in retirement, advised respondents were found to be twice as likely as unadvised respondents to retire at a time of their choosing.

“Those who have taken an early and long-term approach over their working lives to retirement income planning are likely to be in a better position and have a higher level of financial resilience and confidence as they grow older,” CFS said.

“Financial advice plays a significant role in giving Australians greater control over when they retire. Our research found that those who receive advice are twice as likely to retire at a time of their choosing.”

Speaking on the research findings, CFS Superannuation chief executive Kelly Power said that as Australians’ approach to retirement continues to shift, it becomes more important that they receive financial advice to help maximise their potential for a comfortable retirement.

“The way people think about retirement is changing. The traditional idea of retirement as a point in time or a specific date when we stop working is becoming less prevalent,” Power said.

“With flexible access to super and flexible employment to play a larger role in people’s retirement plans, the need for financial advice becomes even more important.

“Those looking to work beyond the age of 67 need to consider the tax implications and how their choices could impact their eligibility for the age pension. Planning early and seeking advice will put you in a better position to retire with confidence.”