Half of clients financially insecure about retirement, women most impacted

As part of its launch for Retirement Confidence Pulse, AMP has highlighted that half of Australia does not feel secure or confident about their retirement.

“The rising cost of living and surging household expenses have seen the annual cost of a comfortable retirement climb by more than $13,000 in just five years,” AMP said.

“With new ASFA data showing Australian couples aged 65 and over now need more than $75,000 a year to maintain that lifestyle.”

Breaking down the data in the inaugural “Pulse Score”, AMP highlighted that women are the most impacted by this insecurity, with only two in five women feeling confident about retirement, opposed to nearly three in five men.

Single mothers also expressed that they felt under pressure, with only one in five in their 40s confident about their retirement, the lowest recorded score from any demographic. By extension, only one in three separated/divorced women express confidence, versus over half of men in the same demographic.

Furthermore, AMP highlighted that “confidence doesn’t arrive at 65”, highlighting that a third of Australians over 65 still do not feel secure about their retirement.

“Australians over the age of 65 will make up nearly a quarter of our population within four decades – a demographic shift set to reshape the nation’s economic and social landscape,” AMP chief executive Alexis George said.

“Yet, as this Pulse shows, despite growing super balances and national wealth, too many feel financially insecure about life after work – an issue that needs to be front and centre for policymakers and the superannuation industry.”

Other experts and research throughout the industry have affirmed AMP’s claims that Australians are experiencing low levels of confidence in retirement.

Cost-of-living pressures, inflation, poor financial literacy and clients outliving their retirement savings are cited as drivers of retirement insecurity.

“I believe most Australians are not well-equipped [to face these challenges in retirement],” Roger Perrett, partner and financial adviser at FreshWater Wealth, told ifa.

“Only three in 10 pre-retirees feel financially prepared for retirement, highlighting a critical readiness gap in retirement planning,” he added, referencing CoreData numbers.

For Perrett, helping clients with this low confidence is a key strategy for advisers.

“Advisers need to create holistic strategies, to ensure there are cash reserves,” he said.

“Advisers need to recommend strategies that can adapt with change, as well as consider risks and future economic uncertainty.”