New research conducted by Roy Morgan Research has confirmed what many financial planners already know — that most Australians are still not paying adequate attention to their superannuation and retirement until they are nearly in their 50s.
And, according to Roy Morgan Research industry communications director, Norman Morris, financial planning has an important role in overcoming the problem.
The research found that, up to 21 years, most people (more than 70 per cent) feel that retirement is too far away to plan for, but that this improves a great deal by around 22 to 24 years, by which time 56.7 per cent think that retirement is too far away.
However, the research analysis suggested it was a potential problem that just under a third (31.4 per cent) of 35 to 39 year olds still believed they were too far from retirement to plan and that in the critical pre-retirement years of 50 to 54, 16.6 per cent considered that retirement was too far away to bother about planning.
Morris suggested the superannuation industry and the government had roles to play to make people aware of the benefits of financial planning, such as creating a more stable set of conditions and rules for superannuation that will improve confidence in being able to plan for the long-term.
“Frequent changes or speculation of changes to the rules governing superannuation do not instil confidence in what for most people is a 40-plus year time frame. There is also a need to improve people’s understanding of superannuation: from its terminology, adequacy and advantages, to its fees and financial advice,” he said.
“Currently there is uncertainty regarding what the government is likely to do regarding rule changes for the taxation of superannuation. Factor in the volatile share market and the complex terminology used in superannuation, and this makes long-term financial planning for individuals a rather precarious occupation,” Morris said.
