Many Australian retirees fear running out of money with the result that up to half of them are spending less than the age pension each year, according to the latest research from Milliman.
A Milliman report, released this week, confirmed other research pointing to the essential conservatism of Australian retirees when it comes to tapping their retirement savings and pointed to the need for greater understanding about why retirees are so fearful and what can be done about it.
It said running out of retirement savings represented a key concern for many people given that a 60-year-old man was now expected to live for a further 26.4 years and a 60-year-old woman for 29.1 years, according to the Government’s 2015 Intergenerational Report.
The Milliman report said this concern might be a driver for the substantial proportion of retirees with account-based pensions who draw down the minimum legislated annual amount.
The report analysis said the findings suggested that mandatory and voluntary measures to boost superannuation might not be enough to produce improved retirement lifestyles without a deeper understanding of the motivations driving retiree behaviour.
The Milliman analysis suggested superannuation funds should be seeking to obtain more information from their members about what might be driving their fears.
“What is certain is that more information is needed – something funds can obtain directly from their members,” the report said. “In this way, super funds’ general advice can be better aligned with the actual experience and needs of members.”
The said such an approach could be part of an important – and broader – conversation about the adequacy of older Australians’ living standards after a lifetime in the workforce.