Page 20 - How Australia Retires

19 Vanguard | How Australia Retires

Australians tend to start their working lives feeling confident about
retirement but this confidence wanes the longer they go without a plan
and purposeful preparation

Australians on the Low Confidence budgets and prioritise savings how to get the retirement lifestyle
Journey are more likely than than the rest of the segments. they want, particularly so late in
those on the High Confidence Aspiring Professionals also desire their journey. Late in the Game
Journey to feel a negative emotion the highest level of income in have much lower expectations
towards retirement such as worry retirement but are uncertain of for income during retirement
or anxiety. They generally feel how to attain the lifestyle they and believe the Age Pension will
unprepared for retirement, lack desire. This might be because form the biggest component of
either understanding or interest in retirement feels too far in the their retirement plan. Without
planning for this later phase of life, future for Aspiring Professionals to much purposeful preparation for
and are generally more concerned think about now or because they retirement to date, those who are
than those on the High Confidence lack the guidance and information Late in the Game may fall into a
Journey about not having enough required to start preparing. cycle of inertia where the later
income in retirement. they leave retirement planning,
Passives skew towards middle the less motivated they are to
While different segments on the age and are beginning to begin, and the lower likelihood of
Low Confidence Journey have lower their expectations about achieving the retirement lifestyle
different levels of expectations retirement income as they get they desire.
and senses of urgency towards closer to retirement. Confidence
retirement, they generally feel is also waning as they age, with This suggests that retirement
less optimistic, and have less of only 22% of Australians in this confidence doesn’t necessarily
an idea of what actions they need segment feeling very confident start low in younger Australians,
to take to achieve the retirement about retirement and 25% feeling but rather, could wane as they
they envision, than those on a High prepared. Only 1 in 4 Passives get closer to retirement and
Confidence Journey. make regular contributions to feel increasingly worried about
their superannuation. They also not being able to afford the
Interestingly, however, Aspiring have only a general idea of how lifestyle they want because they
Professionals (the segment that to prepare for retirement, and no lack a retirement plan – a key
are youngest on average), exhibit firm or detailed plan. difference between those on the
the highest level of retirement Low Confidence Journey and High
confidence out of the segments Similarly, out of those who are Confidence Journey.
on the Low Confidence Journey, Late in the Game (the segment
with 29% of Australians in this that skews the oldest), just 23%
category stating they are “very of Australians feel very confident
confident”. They are also the most about retirement and just 27% feel
optimistic, with 41% of Aspiring optimistic and 25% feel prepared.
Professionals feeling positive Despite likely having a higher
emotions towards retirement. sense of urgency as they near
Notably, Aspiring Professionals also the traditional retirement age,
exhibit some similar traits to those they are the least interested in
who are Highly Confident, including retirement planning, the least likely
being more likely to set clear to budget and the most unsure of