Findex research has emphasised the role of financial advice in addressing the critical superannuation knowledge gap.
New research from Findex surveying approximately 1,000 Australians has revealed consumers’ literacy levels and attitudes towards their super.
According to the advisory firm, just three in 10 Australians claim they know their super balance to the nearest $1,000, while two in five know the approximate balance. Meanwhile, 30 per cent have only a vague idea or no idea what their balance is.
When assessing knowledge of super concepts, 54 per cent of participants have minimal or no understanding of their retirement savings. Less than half (46 per cent) of Australians have a strong or some understanding of the tax concessions available within super.
These findings affirmed the crucial role of financial advisers in relation to super literacy. Australians who have received professional advice are nearly twice more likely than those who have never received it to have a strong or some understanding of super concepts (64 per cent versus 35 per cent).
“The current level of superannuation literacy presents a clear opportunity for Australians to proactively take charge of their financial future – especially Millennials and Gen Zs who will have had super contributions throughout their careers and also have the benefit of a longer runway towards retirement,” commented Tony Roussos, Findex co-chief executive.
Findex also found that on average, Australians believe they need $1.1 million in their super balance for a comfortable retirement by age 67.
This was nearly double the Association of Superannuation Funds of Australia (ASFA) retirement standard which states a super balance of $690,000 for couples and $595,000 for a single person is required for a comfortable and modest retirement.
Research from Colonial First State (CFS) last week also revealed similar findings, with $1.6 million being the average amount participants estimated they would need in retirement savings.
Jonathan Scholes, Findex head of advice teams for wealth, explained: “These numbers reiterate the need to improve financial literacy and the importance of accessible professional financial advice, especially as Aussies have set themselves a very high target of a million-dollar super balance when the average balance is around $189,890 for men and $150,920 for women.”
While the research demonstrated Australians’ relatively weak understanding of super concepts, it discovered that the majority appear to be engaged or interested in their super.
Nearly 80 per cent of Australians expect they will benefit from the contributions added to their retirement savings in every pay, while over two-thirds have contributed or considered contributing additional funds into their super.
