A holistic look at what makes a ‘good’ retirement

What did we do?

BehaviourWorks has so far conducted two surveys (2017 and 2018), both involving around 1,500 Australians aged over 50 who were almost evenly divided between retirees and pre-retirees, with an average age of 63.

The researchers considered a broad range of factors, including financial awareness, financial literacy, planning skills and retirement awareness, as well as health and wellbeing and social connectedness.

The study also captured information beyond standard demographic and financial circumstances, such as personality traits, cognitive tests and locus of control (an individual’s belief system regarding the causes of his or her experiences and the factors to which that person attributes success or failure).

What did we find?

The study revealed some notable differences between retirees and pre-retirees, as well as some common fears and challenges.

Predictably, having an education, a spouse, a home, some income and assets, as well as cognitive and physical health, were associated with greater retirement confidence.

The survey also revealed that the more engaged Australians are in their superannuation, the less anxious they feel when entering into the pre-retirement phase – meaning more emphasis should be placed on improving financial literacy and “saving with discipline” by setting retirement saving goals and using the services of a financial advisor.

Retirees vs Non-Retirees

Pre-retirees are far less confident about retiring than people who have already retired, expecting to work up to seven years longer and believing that they will need more money and will need to rely more on superannuation and the Government Age Pension.

Only a quarter of those surveyed believed they had saved enough for their retirement and more than a third felt some anxiety about retirement, which may be understandable when you consider that less than a half have a financial plan for retirement and only seven per cent had accessed the services of a financial advisor over the past 12 months.

Human factors

While money (and secure housing) is clearly an important predictor of a ‘good retirement’, the index places equal importance on human measures such as health, social life and fulfilment.

In fact, the more connected people feel they are with their family, friends and the wider community, the more confident they are about their retirement. While only 40 per cent believe they will have a comfortable social life after retirement, 68 per cent believe retirement will give them time to make new friends.

Some suggestions

The public-facing report promotes four key factors that, it says, will help Australians have a better retirement: building wealth, maintaining community engagement, improving health and wellbeing and setting goals.

Where to from here?

The survey will be repeated annually, with the results of the RCI likely to have some policy implications, both within AustralianSuper and further afield.