Australians know that they can expect to live longer, but are not preparing for retirement any sooner, according to an AXA survey released this week.
AXA’s Retirement Scope survey found that 73% of 55-60 year olds said they had started preparing for retirement. Given the majority of those surveyed said that they believed they would retire at age 64, this leaves just nine years for the accumulation of wealth to fund their retirement.
AXA’s General Manager of Sales and Marketing, Adrian Emery, said that in many cases this is too late.
“We all know that we should be thinking responsibly about life after work, but there’s always something else to do, somewhere else to go, or something else to buy, so most of us put off planning until it’s too late.”
“The message to Gen Xers is that you are in the box seat. The earlier you start, the easier your experience will be later in life,” said Mr Emery.
However, the survey revealed that only 33 % of those aged 31-36 had started planning for retirement.
The delay in planning for the future may also be a concern for consumers looking to purchase insurance. If they delay the purchase of insurance to protect the wealth being accumulated for retirement, consumers also risk loadings, exclusions or in some cases being declined for cover.
According to AXA, the increasing talk about ‘longevity’ risk and the realisation that people will be living longer lives has not had an effect on Australians’ view of retirement.
Australians were less focused on the negative aspects of retirement … and more focused on positive aspects
When compared to other nations surveyed, Australians were less focused on the negative aspects of retirement, such as ill health and dependence (38%), and more focused on positive aspects of retirement, such as getting involved in new activities and having more time to themselves (87%).
However, the Australian Institute of Health and Welfare (AIHW) paints a less rosy picture of retirement. Although Australian life expectancy increased between 1996 and 2003 by 3.6% for males and 2.3% for females, data from AIHW suggests that the average years of life spent in an unhealthy state also increased by 11.6% for males and 3.9% for females.
AXA’s survey also indicated that when compared to other countries, Australians are less likely to articulate their retirement needs, with more than three quarters unable to estimate what their future retirement income would be.
In addition, almost one third of Australians admit to never reviewing their retirement plans and only 25 per cent said they annually review their retirement plans. According to AXA, this further illustrates Australia’s “she’ll be right” attitude.
