A new study has revealed that two in five Baby Boomers are not confident they’ll retire comfortably at the age of 65, meaning many older Australians see themselves having to work for longer before they can enjoy a hard-earned retirement.
The study, conducted by comparison website comparethemartket.com.au, found many of those aged between 55 and 64 were not confident in their ability to give up work for good when they reach 65, which is regularly accepted as an appropriate age to exit the workforce and enter this exciting new stage of life.
Compare the Market’s General Manager of Banking Rod Attrill said with a growing debate around cost of living, low wage growth and rising unemployment rates, it’s no surprise that the older generations are worried about the future and “their ability to hold down a job and earn enough money for their retirement years”.
He continued: “We also tend to become more self-reliant with our money as we age however, this can have adverse effects as we become too involved in how we manage our own money without speaking to objective third parties or professionals who could provide a different financial perspective. This could be the difference between continuing with poor money habits or reassessing how we better control our cash flow day-to-day.”
According to the Financial Consciousness Index developed by Deloitte Economics, Boomers were also less inclined to turn to others for financial help and advice with 45 per cent confessing that when making significant financial decisions, they don’t consult with anyone and make their own choices.
However, despite their retirement woes, Boomers came out as the most financially conscious, scoring 51 out of 100 which placed them in the ‘conscious’ category, while every other age demographic scored lower. In fact, Gen Zs and the over-70 age groups had the lowest results, coming in at 44 out of 100 and 47 out of 100 respectively.
The findings also revealed 22 per cent of Boomers never save any of their income after each pay cycle, only 16 per cent have an annual budget, and a further 25 per cent admitted to not having a budget or financial plans in place.
“Older demographics also have an issue when it comes to putting money away for a rainy day and tracking expenses over time to make sure they are set up for the future. With a lack of confidence comes a lack of willingness to adapt to new financial behaviours and technology that could ease the pressure when it comes to dealing with bills or even debt,” Rod explained.
“If those heading into their 50s can make the effort to sit down and go through the common expenses that build up over time, they can start making a real difference across their various expenditures and reduce costs. From comparing financial products, through to cancelling subscriptions or memberships, it’s these small changes that can have a big impact over time.
“This report is a great reminder for Aussies, old and young alike, to track their financial behaviours and attitudes year on year to see if anything has changed financially or needs further improvement. By benchmarking Australian’s sentiment and perceptions around how they manage their money, we are able to gain important insights that could shape behaviours moving forward – hopefully, in a more positive direction.”
Meanwhile, it comes after research found that people who lend money to their kids and grandchildren may not be properly planning for their future. In fact, research released by UK brand Legal and General last month shows how younger generations are increasingly relying on the ‘bank of mum and dad’ to scoop up enough cash for their own home deposits and parents aren’t thinking about how this will impact their retirement.
It was found that 55 per cent of over-55s who offered to help a younger family member had to cut back as a result and accepted a lower standard of living after they offered help. What’s more is 26 per cent of people admitted they didn’t think they had enough money to last retirement because they helped their kids or grandchildren and 16 per cent said they were relying on a lifetime mortgage to help others out.
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