Australia's superannuation industry needs to better prepare consumers for the realities of retirement, with research revealing the average Australian will outlive their super by five years.
Data from Mercer's ‘Expectations versus reality of retirement' survey showed that 40 per cent of Australians were forced into earlier retirement before they were financially ready, due to redundancy or for health reasons.
While half the population underestimated their life expectancy by more than two year, with one in four white collar workers living four years longer than average, the research found.
Mercer's Managing Director and Pacific Market Leader, David Anderson, said the increasing life-expectancy of Australians flagged the need for super funds to take proactive steps to prepare clients for retirement.
"The superannuation industry has a responsibility to educate consumers and provide innovative solutions to help during retirement as well as leading up to it," he said.
"We're beginning to see a wider range of solutions emerge as the industry shifts its focus from accumulating wealth to providing an income throughout retirement — to the very end — and this is encouraging for Australians."
The research also revealed that almost half of all the moment surveyed were concerned about the state of their finances in later life, while a third of men were.
It also found that two thirds of retired respondents said they would "simply be careful" with how they used their savings to combat longevity concerns.
While only one in three respondents said they would engage with a financial advisor to protect them against longevity risk.
