More retirees expect savings to outlast their lives

At the same time as the release of research confirming most Australians will run out of superannuation before they die, major life insurer TAL has released research confirming Australians remain confused about their financial options for retirement.

However, the same research suggests that for the first time in nine years a greater proportion of retirees expect their savings will outlast their retirement savings.

The TAL and Investments Trends 2023 Retirement Income Report has found 65% of non-retirees don’t know about existing retirement income products offered by their superannuation funds and those who are familiar with products such as pensions or lifetime income products have a limited understanding of how they actually work.

The research has suggested that this highlights the important role of retirement specialists, including superannuation funds, in providing guidance to boost financial literacy.

Dealing with retirement income concerns, the research noted that, for the first time in nine years, a greater proportion of retirees expect their savings will outlast their retirement (35% in 2023 up from 28% in 2022) than those who expect to outlive their retirement savings (33% in 2023 down from 48% in 2022).

It said three in five retirees (60%) feel they are able to live comfortably, up from 55% in 2022.

“For non-retirees, the retirement funding gap – the difference between expected income and perceived income needed for a comfortable retirement – has narrowed to an average of 27%, down from 34% in 2022, with perceived required income reaching a record high of $4,700 per month, up from $4,300 in 2022,” it said.

“Those reporting a retirement funding gap say they plan to work for longer (51%), reduce spending (48%), contribute more to super (38%), or seek advice from a financial adviser (35%).”

TAL declared that its position on retirement was that by working together superannuation funds and insurers could deliver retirement solutions that combine lifetime income with flexible access to capital, giving retirees the confidence to spend and improving their retirement outcomes.