Cost of living pressures dampen retiree confidence
Physical health and financial security are the primary factors influencing how content Australians in or near retirement are, according to a new report.
Challenger's inaugural Retirement Happiness Index, in collaboration with independent research house YouGov, conducted the study of over 1000 Australians over the age of 60 to delve into the intricacies of retirement happiness.
The study, which took into account a range of factors such as mental and physical health, social connections, purpose, and financial wellbeing, revealed a score of 70 for Australians over 60.
Notably, activities and hobbies scored the highest (79.5) followed by mental health (77.6).
Physical health (61.5) and financial stability (56.3) were flagged as areas with the most potential for improvement in enhancing overall wellbeing.
More than two in three (66%) Australians over 60 said they would be much happier if they didn't have to worry about their finances in retirement, while more than 70% believe that a guaranteed income in retirement would significantly boost happiness, with more than 40% strongly agreeing.
Challenger chief executive, customer Mandy Mannix noted that it was fantastic to see that the majority of Australians were enjoying or expecting a happy, healthy retirement.
"A better retirement is about so much more than finances but having a degree of confidence that your savings will last plays an important role.
"Almost half of respondents identify financial security as an area they wish to improve, highlighting the work we must do as an industry to safeguard retirees' golden years and foster a better, happier retirement.
"Reassuringly retirees felt their happiness would improve with access to the right financial education, as well as support through financial advice and a regular income to enjoy a safe, stable retirement. This would empower retirees with the confidence to spend and capacity to pursue their passions."
Rising living costs and affordability were growing concerns though, with two in three Australians over 60 saying it impacted their confidence that they would have enough money for retirement.
Unadvised Australians were more likely to report cost-of-living as having a significant impact on their financial security (39%) compared to those who have received financial advice (25%).
"We know the fear of outliving savings is a growing concern among older Australians," Mannix says.
"Providing retirees with the confidence to convert their retirement savings into a regular income can materially improve their quality of life, supporting better retirement outcomes as well as benefiting broader society and the Australian economy."
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