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Major retirement trend leaving Aussies 'worse off' in their twilight years: 'Concerning'

Only 51 per cent of all adult Aussies have looked for advice on their retirement plans.

Stewart Perrie
·Senior Journalist
·4-min read
Mary Delahunty next to Aussie couple at home
Aussies are being urged to enquire about their retirement plans. (Source: Victoria University/Getty)

Aussies are being urged to ask some simple questions about their superannuation and retirement plans. New figures have revealed a new trend emerging as a "concerning" number of Aussies have never consulted anyone about what they want to do after they finish work for good.

The Association of Superannuation Funds Australia (ASFA) has published new research showing 49 per cent of all adult Aussies and around 40 per cent of those over 65 haven't made a single enquiry about their twilight years. ASFA CEO Mary Delahunty said the figures should serve as a wakeup call.

“It’s concerning to see such a lack of engagement with information about retirement," she said.

"It means many Australians may end up worse off than they should be in their post-working lives, simply because they haven’t been empowered with the relevant guidance.

“This research highlights the need for urgent reform to make high-quality, low-cost advice easily accessible to every Australian worker through their super funds."

Recent Finder research also highlighted that only one in 10 people knew how their super fund performed over the past 12 months.

Sarah Megginson, personal finance expert at Finder, said Australians need to take a stronger interest in their super.

"The more engaged you are with your retirement savings, the better results you will generally achieve," she explained. "Choosing a high-performing super fund over a low-performing fund can make a huge difference to your retirement savings."

There are plenty of information sources out there, but ASFA said some come with inherent risk.

Professional services like financial advisors were one of the most popular sources across Australia, with 21 per cent of people seeking out retirement advice that way.

Friends and family were also popular (21 per cent), followed by online calculators and online resources (15 per cent), advisors from super funds (12 per cent), reading the news (8 per cent) and social media (6 per cent).

ASFA's data found young people aged 18 to 34 were 15 times more likely to seek out information about retirement on social media compared to people over the age of 65.

But the Association urged caution about finding advice from social media.

Delahunty said while it's good to see young people learning more about retirement, "it’s alarming to see the reliance of social media".

“As an industry, we have seen a number of examples of high-pressure marketing tactics, including targeting account holders through social media, which ASIC has identified as a growing concern," she said.

“Most scams begin through interactions over platforms like Reddit, TikTok, and X. Young people’s personal trust in social media advice, combined with an increased likelihood to seek advice over social media, makes them particularly vulnerable to cybercrime and exploitation that threatens their superannuation balances and consequently a comfortable retirement."

ASFA's data showed there was a high degree of trust in professional services for retirement plans.

But Delahunty was "concerned" that these services are being underutilised, particularly by the older community.

"This mismatch suggests that there are significant barriers preventing Australians from accessing the advice they need,” she said.

“Although people trust financial advisors as a source of information, the problem is that their services remain too expensive for the average working Australian to access.

"Sadly, these are the people most in need of quality financial advice to improve their retirement outcomes."

The average cost of seeing a financial advisor in Australia is at least $3,500, according to Adviser Ratings. For comprehensive ongoing advice only, the cost is closer to about $5,000 a year on average.

ASFA wants the retirement income sector to progress the second tranche of Delivering Better Financial Outcomes Reforms, which came from a government-led Quality of Advice Review two years ago.

“The advice in super legislation will reduce red tape and improve the efficiency of accessing advice. It will be a revolutionary step for Australian’s access to trusted advice that will improve their financial wellbeing in retirement," Delahunty added.

The government has committed to getting the second tranche of recommendations finished by the end of 2024.

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