Many are financially unprepared: REST
Investors must make sure they have a clear and justified plan for the future in light of new research showing just 14 per cent of Baby Boomers feel ‘financially prepared’ for retirement, according to REST Industry Super.
A new white paper The Journey Begins, released by REST, found that 70 per cent of respondents hadn’t sought formal financial advice about their retirement, despite high expectations about what retirement will bring.
“What we found are some sizeable gaps between what Baby Boomers are envisaging for their retirement and what the reality will be,” said REST CEO Damian Hill.
Respondents nominated, on average, far below the $56,236 ‘comfortable lifestyle’ budget for a couple. REST noted that 49 per cent of singles and 61 per cent of couples underestimated the amount they would need, even while half of respondents didn’t envision giving anything up due to financial constraints.
“In order to avoid disappointment for many, the financial services sector will need to work with the government to educate and encourage people to plan and prepare far earlier,” said Mr Hill.
The paper surveyed 1,200 Australians approaching retirement.
The research shows that Baby Boomers are largely unprepared for retirement, with most people leaving it very late to start the planning process. One third of respondents believe they are completely unprepared financially for retirement.
“In spite of this, 70 per cent of Australian Baby Boomers haven’t sought financial advice relating to their retirement plans. While some see no need, or choose to handle their own affairs, many actually consider financial advice to be too expensive or not trustworthy,” he said.
Momentum Wealth’s Damian Collins recently told Smart Property Investment that keeping the goal in mind can help investors stay on the path towards financial freedom.
Investors should bear in mind a time frame and a realistic dollar figure to achieve for that time.
“It’s hard to see things through to the end goal when you’re 25 and retirement is 35 or 40 years away. It’s about discipline,” Mr Collins said.