Insights from the 2023 Australian Retirement Survey amid shifting landscapes

The State Street Global Advisors’ Global Retirement Reality Report, focusing on the Australian retirement landscape, presents key findings from their survey conducted during the third quarter of 2023.

The report reveals insights into retirement confidence, investment market influence, retirement income strategies, annuities, sustainability expectations, and gender differences.

The global online survey, conducted during August 2023 with international data analytics firm YouGov, engaged a total of 4,257 individuals participating in workplace-sponsored savings plans (or the market equivalent) in Canada, Australia, Ireland, the UK and the US.

Investment Markets and Retirement Confidence

Contrary to expectations, the report indicates that investment markets had a limited impact on retirement confidence among Australian respondents. Despite market reversals, measures of confidence appeared to weaken rather than strengthen. The top factors negatively affecting confidence were inflation and the cost of living crisis (73%), mortgage debt/rent and housing costs (38%), and medical expenses (35%). This suggests that retirement confidence is influenced by a combination of economic factors beyond simple investment returns.

Retirement Income Strategies

The report acknowledges the positive start of Australia’s Retirement Income Covenant requirements, which aim to balance maximising expected retirement income, managing risks, and allowing flexible access to funds during retirement. Respondents favoured a model that offers flexibility in the early years and security in later years, aligning with the covenant’s principles. However, diverse preferences among respondents highlight the importance of keeping member involvement at the centre of retirement income strategy.

Annuities in Australia

The survey identifies a potential turning point for annuities in Australia, indicating a softening of negative perceptions. The acceptance of stereotypical negative statements about annuities decreased, suggesting a possible shift in attitudes. An uptick in respondents including annuities in their definitions of retirement income further supports the notion that annuities may become more accepted as part of holistic retirement solutions.

Challenges in Retirement Income Planning

Two significant developments in December 2023 addressed challenges in retirement incomes. The government’s response to the Quality in Advice Review emphasised the difficulty of finding a balance between affordable, accessible financial advice and consumer protections. Treasury’s paper on the retirement phase of superannuation highlighted the need for active engagement from retirees to effectively meet retirement income covenant objectives. The report underscores the importance of affordable and accessible advice in the retirement ecosystem.

Shifting Attitudes towards Sustainability

A notable shift in Australians’ expectations for sustainability emerges in the report. While 67% considered sustainability important in 2022, this proportion dropped to 56% in 2023. The reasons for this shift remain unclear but could be influenced by regulatory changes, politics, or altered marketing strategies. Despite the drop in broader support, specific exclusion categories like controversial weapons, gambling, human rights violators, and tobacco still garnered significant support.

Evolving Gender Differences

The report acknowledges changes in gender differences regarding retirement preferences. While some differences persisted, others reduced or disappeared. Women’s preferences for flexible working arrangements and concerns about inflation and the cost of living crisis saw shifts in 2023, suggesting evolving attitudes and preferences among both men and women.

The report concludes that while Australia is generally heading in the right direction regarding retirement incomes, some unexpected results were found, challenging assumptions. The survey emphasises the complexity of retirement planning, indicating that factors like confidence, income strategies, annuities, sustainability expectations, and gender differences are integral considerations for policymakers and industry players.

In conclusion, the findings from the Australian Retirement Survey offer a nuanced understanding of the retirement landscape, highlighting both positive trends and areas that require further attention and innovation.


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