Financial stress will keep baby boomers in the workforce longer than they would like, according to new a survey, although many high-net worth individuals will choose to put off retirement because they are highly engaged in their jobs.
A study of almost 1,700 Australians aged 55 and above by research firm CoreData found that 86% of pre-retirees expect to work part-time or a ‘bit here and there’ once they step down from full-time employment.
CoreData said one-third reported they wouldn’t be able to choose the time of their retirement, while almost one in four said they were unlikely to be able to meet their retirement income needs.
Kristen Turnbull, Head of Advice, Wealth and Superannuation at CoreData said difficulties in clawing back losses from the global financial crisis, and confusion over government policies on superannuation were troubling pre-retirees.
“The GFC wasn’t long ago and is still fresh in people’s minds,” Turnbull told SmartCompany.
“It’s been difficult for people to recover after seeing significant losses.”
Also of concern is how much money will be needed for retirement, and for how long. The survey found pre-retirees expect they will need just over $1,000 per week to live on.
While acknowledging that some regulatory changes have increased the attractiveness of super, Turnbull says many individuals are turning to self-managed funds to escape regular tweaks to the system.
But it’s not all bad news.
Turnbull says those with the least need to stay in the workforce – high-net worth individuals – are actually more likely to stay in their job because they enjoy it.
Noting a strong link between a lack of knowledge about retirement and feeling overwhelmed, she said businesses should work hand-in-hand with older workers to better prepare for retirement.
Turnbull said that while pre-retirees have less knowledge about products, and are more open to receiving advice from their super funds, post-retirees are more likely to use a financial adviser, and have a stronger desire for online tools and information.
The survey follows a Federal Government announcement that it will commit $43.3 million to encourage mature-age Australians to stay in the workforce longer.
Under plans announced by Treasurer Wayne Swan, employers will be encouraged to retrain mature-aged workers.
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