Page 2 - How Australia Retires

01 Vanguard | How Australia Retires

Foreword

Vanguard Australia is delighted products available. Through this balance is. Opportunity, and
to introduce our inaugural How study, as well as our past research perhaps a need, therefore exists
Australia Retires report, a study including Vanguard’s Roadmap for the superannuation industry
exploring Australians’ attitudes to Financial Security (2021) and on the whole to rethink member
towards retirement and how they How Australia Saves (2019), we experiences and methods of
feel about this phase of life. aim to contribute to a better engagement, to simplify and
understanding of the opportunities improve transparency regarding
Improving retirement outcomes and challenges facing Australians, fee structures, and to support
for investors has been a focus so that as an industry we can stronger retirement outcomes.
for Vanguard for as long as innovate and evolve in support
we’ve been in business. Our late of members achieving their What’s also clear from the
founder, Jack Bogle, created retirement goals - and living findings is the positive impact
the first index mutual fund to the lifestyles they envision. of professional financial advice
allow individual investors access on perceptions of retirement
to low-cost investment options One of the key findings in this preparedness. While financial
that made saving for retirement report is that having a well- information is abundant – on
more affordable. In the U.S., we documented, detailed financial social media, in podcasts, from
have decades-long experience plan is one of the most effective family and friends – this study
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managing the retirement savings ways to not only achieve a shows a positive relationship
of millions of Americans, helping successful retirement, but to between professional advice
them save for a secure retirement alleviate the emotional burdens and purposeful preparation
via our target-date funds. and anxieties that Australians for retirement, and ultimately
Recently in Australia, we’ve also can feel towards retiring. For greater retirement confidence
leveraged this global retirement younger Australians in particular down the line.
expertise to help launch Vanguard who are redefining the traditional
Super and its flagship MySuper path towards retirement with This inaugural edition of How
Lifecycle product, with the vision career breaks, parental leave and Australia Retires, together with
of reshaping retirement and travel, having a plan is paramount future instalments, will reveal how
superannuation for the benefit to protecting against these sentiment towards retirement
of all Australians. pauses in paid work impeding evolves over time and how
their ability to accumulate confident, both emotionally and
This study joins Vanguard’s enough superannuation and financially, Australians are to
extensive research into all facets of save adequately for retirement. retire. We hope these insights will
retirement, a complex and critically help guide us towards positive
important phase of life for many This study also provides evidence actions that can be taken, by
Australians. Amid ever-changing that Australians display organisations and individuals,
regulations, and a need to meet relatively low engagement and to help Australians feel more
diverse retirement needs, there is understanding when it comes to confident about retirement.
well-recognised demand for more superannuation, with half not
innovative retirement solutions knowing how much they pay in Daniel Shrimski
that match the sophistication of annual fees, and 1 in 4 not knowing Managing Director,
the more mature accumulation what their current superannuation Vanguard Australia

1. This study has found that a financial plan can be helpful whether it is formal or informal. For example, a plan could refer to a detailed,
documented plan, or simply having a well-thought-out strategy in mind. Regardless of how respondents in this research defined “a plan”, the
overarching finding is that Australians need to give retirement adequate thought, no matter what form that might take. Vanguard defines a
sound financial plan as one that begins by outlining the investor’s objective as well as any significant constraints. The plan should be designed
to endure through changing market environments and should be flexible enough to adjust for unexpected events along the way. Once the plan
is in place, the investor should re-evaluate it at regular intervals. An example of an investment plan may include the following components:
objective, constraints, saving or spending target, asset allocation target, rebalancing methodology, and monitoring and evaluation.