Many Australian retirees fear running out of money with the result that up to half of them are spending less than the age pension each year, according to the latest research from Milliman.
A Milliman report, released this week, has confirmed other research pointing to the essential conservatism of Australian retirees when it comes to tapping their retirement savings.
It said running out of retirement savings represented a key concern for many people given that a 60-year-old man was now expected to live for a further 26.4 years and a 60-year-old woman for 29.1 years, according to the government’s 2015 Intergenerational Report.
The Milliman report said this concern might be a driver for the substantial proportion of retirees with account-based pensions who draw down the minimum legislated annual amount.
The report analysis said the findings suggested that mandatory and voluntary measures to boost super might not be enough to produce improved retirement lifestyles without a deeper understanding of the motivations driving retiree behaviour.
The Milliman analysis suggested superannuation funds should be seeking to obtain more information from their members about what might be driving their fears.
“What is certain is that more information is needed – something funds can obtain directly from their members,” the report said. “In this way, super funds’ general advice can be better aligned with the actual experience and needs of members.”
The said such an approach could be part of an important – and broader – conversation about the adequacy of older Australians’ living standards after a lifetime in the workforce.
Speaking to Super Review, the $70 billion fund has unveiled its new solution to address the ‘cognitive load’ of retirement as members enter their golden years.
New research has suggested it’s time to reconsider the home as a fourth pillar of the retirement income system, alongside the age pension, superannuation, and voluntary private savings.
New research has revealed over 60 per cent of retirees believe their super fund offers retirement income products suitable to support their retirement lifestyle.
Some retirees are “needlessly” paying two sets of fees and often more tax than they need to, according to the industry body.