Cost of living pressures fast-track retirement planning: HESTA

New research conducted on behalf of Australian superannuation fund, HESTA, found young Australians were the most likely to plan more for their retirement due to cost of living pressures.

The survey of 1,000 adults asked respondents what financial changes or plans they had made due to cost of living pressures. Just under half (49 per cent) of 18-to-39-year-olds said they had taken more action to plan for their retirement in the last 12 months, including salary sacrificing or using online calculators to track their super balance.

The other two generational segments scored lower, with 44 per cent of 40-to-59-year-olds and 29 per cent of those aged 55 and older saying cost of living pressures had led them to take more initiative to plan for retirement.

Across all age groups, 41 per cent had taken steps to plan for retirement, 51 per cent made no changes and six per cent were taking less action, such as reducing salary sacrifice contributions or withdrawing from their superannuation.

“It’s encouraging to see younger Australians actively planning for their retirement because even small changes made now can have a big impact down the track,” HESTA chief executive, Debby Blakey said.

“For many young Australians, super will be their biggest financial asset. Their parents are also starting to retire with super balances built over their working lives.

“This younger generation is seeing first-hand how important super is to long-term financial security and the power of growing retirement savings over time.”

The survey also indicated that the main worry for retirement was running out of money, felt by 68 per cent of those aged under 40, 64 per cent of 40-to-54-year-olds and 51 per cent of those aged 55 and over.

This fact was also mirrored by 18-to-39-year-olds who reported that another key concern was being unable to maintain their desired lifestyle in retirement, compared to only 49 per cent of 40-to-54-year-olds and 45 per cent of those aged 55 and over.

When considered from a gendered angle, women were more likely than men to be concerned about running out of money in retirement (65 per cent compared to 57 per cent of males), as well as health issues and medical expenses (62 per cent versus 52 per cent of men).

“We know that many of our members are doing it tough right now and experiencing cost-of-living pressures,” Blakey said.

“When you’re facing these immediate concerns, it can feel challenging to turn your mind to long-term financial planning. It’s important to remember that taking that first step to improve your long-term financial future can be so powerful over time.”