Australians wary but confident about retirement prospects: Report

The latest report from MFS Investment Management found that 75 per cent of superannuation fund members believed they needed to save more than they had planned for their retirement, despite a marked rise in Australians’ overall retirement confidence.

While the government’s recent announcement that they would be going ahead with introducing a new class of adviser (NCAs) to provide simple advice, coupled with some super funds making pre-emptive moves to accommodate this as much as they can presently, leaving much of the advice profession wary at best, members appear rather pleased at the prospect.

Utilising the findings from 700 Australian retirement plan members and more than 300 retirees, the 2024 MFS Global Retirement Survey found that 55 per cent of all super contributors relied on information provided by their super fund to make retirement decisions, according to the report, putting super funds in a good position to deliver more substantial guidance.

However, according to the report, participants were just as likely to speak to a financial adviser (30 per cent) as they were to a family member (30 per cent) to help them with decisions regarding retirement and were slightly more inclined to utilise financial media (31 per cent) as a means of gathering information.

Notably, confidence in when Australians expect to retire seems to have reached a middle ground of sorts, with the number of Australians who don’t expect to retire dropping to 28 per cent, down from 40 per cent in 2023, though only 23 per cent of participants were sure they’d be able to retire at the age they wanted, down from 26 per cent.

A report released by Brighter Super, in conjunction with Investment Trends, last month noted similar findings, noting that six in 10 (60 per cent) retirees felt confident they had enough, though it also found that “seeking information or guidance about retirement [was] the biggest differentiator of retirement preparedness”, highlighting the necessity of financial advice in retirement planning.

Despite this shift in a more positive direction, one in two Australians contributing to their super indicated that saving enough for retirement was a major financial concern of theirs, though day-to-day financial obligations are still of paramount concern as well, with 49 per cent indicating that this was their top concern as the cost of living continues to put pressure on Australians.

Managing director and head of Australia and New Zealand for MFS Investment Management, Josh Barton, noted the clear need for financial advice in helping Australians plan for and navigate their retirement.

“It is concerning to see in our survey results how few Australians rely on financial advice to manage their financial affairs. Whilst it is encouraging to see the government trying to address this blind spot and enable more advice to be provided within superannuation, there is clearly much work to do, and clarification needed,” Barton said.

“Meanwhile, critical understanding gaps are likely to persist, such as those discovered by our survey in relation to the risk and performance misnomers associated with passive investing. While more retirement plans appear to be within reach, advice remains key to achieving it, even more so today given investment markets have become increasingly complex and difficult to navigate.”