Retirement: Baby boomers in denial says survey

Australian baby boomers are underestimating how much they will need for a comfortable retirement, even though they have high expectations for their retirement lifestyle, based on a survey conducted by super fund REST Industry Super.

REST Industry Super commissioned the survey that interviewed 1,200 Australians approaching retirement (aged over 50 but not yet retired) to find out more about their financial wealth, plans and expectations.

REST chief executive officer, Damien Hill says, “What we found is some sizeable gap between what baby boomers are envisaging for their retirement and what the reality will be.  In order to avoid disappointment for many, the financial services sector will need to work with government to educate and encourage people to plan and prepare far earlier.”

“This poses a significant education challenge for the financial services sector and government to help these people get ready for retirement. Many super funds… provide access to financial advice as a service for members. However, education needs to be targeted and delivered in such a way that all retirees… understand the importance of early planning and seeking advice for a massive life change…,” says Hill.

SuperGuide comment: The more detailed survey results are outlined later in the article but as the co-founder of SuperGuide I wish to differentiate our readership from the participants of this industry survey. Based on our own survey earlier this year and the questions and comments that we receive from readers via our website, our SuperGuide readers are not only thinking about their retirement plans, they are asking the right questions when working towards creating a comfortable retirement. Clearly, our website is specifically about superannuation and retirement so you would obviously expect our audience to have such a high level of engagement with their retirement plans. Perhaps the government, and the financial services sector, should be working with SuperGuide to determine the most effective way to encourage people to educate themselves, and plan and prepare for retirement.

Sandwich generation and part-timers

Two significant findings from the REST survey however, do mirror what seems to be happening with SuperGuide readers, namely, the trend towards easing into retirement with part-time work, and the hefty percentage of middle-aged Australians who remain financially responsible for children while also potentially caring for elderly parents.

In relation to ongoing financial responsibilities, a third of unretired over-50s have financial dependants whose needs will be taken into account when deciding when to retire, or even whether to retire.

In the REST survey, of those respondents expecting to retire, 42% of this group said they would ease into retirement via part-time work, and 26% of this group have already started this transition process.  About a third (31%) of respondents had no plans to ease into retirement, that is, they will work full-time one day and be retired the next day. The remaining 28% have not decided how they plan to move into retirement.

A disturbing statistic is that almost half of the respondents over the age of 65 (that is 45 of the 90 surveyed), would have preferred to have retired already. Presumably, the Global Financial Crisis (GFC) and sluggish investment markets have meant an enforced longer working life.

In retirement, I don’t want to give up…

The top 5 items that respondents of the REST survey said they were not prepared to give up were:

  1. Internet/mobile phone
  2. Domestic holidays
  3. International holidays
  4. Dining out
  5. Health insurance

Nearly two-thirds (62%) of those surveyed in the REST survey, said they were looking forward to relaxing and enjoying the rewards of a life of working, with more time to travel and participate in recreation activities. On the flipside, 40% have some reservations about finishing work, and 16% said they were not looking forward to retiring at all.

Financial advice not in demand

A whopping 70% of Australians surveyed in the REST survey have not sought financial advice to assist with retirement plans. The main reasons for this lack of enthusiasm for financial advice are:

  • No need for financial advice
  • Handle their own affairs
  • Too expensive
  • Not trustworthy

You can access the full REST survey report, ‘The Journey Begins’ by clicking on this link and then clicking on the PDF link at the end of the text


  1. Parts of the survey agree with what I see, and parts don’t.

    I have always been very dubious about the amount of money you need in retirement – I was on a good salary, but used less than $30,000 a year in the 3 years before my recent retirement – and I was very comfortable. Almost no financial adviser (or calculator) accepted that as a reasonable figure for me in retirement. Many people I know who are retired live on less, and appear to be happy with their lifestyle. Why does the report assume that people don’t know what they actually will need? They don’t appear to have asked respondents how much they actually live on now.

    Like many, I found that once I had no children at home and no mortgage, there was suddenly a lot of my wage left over, that could be put into superannuation or other investments, and for three years I managed to salary sacrifice almost to the limit. This really increased my superannuation a lot! The report says that people only look at retirement savings in the last few years. I think it is reasonable for people to do so since that is when you suddenly have disposable income. OK, it would be better to do so earlier. In the course I am currently doing (with all these 18 year olds), the teacher said they currently had more disposable income than they would ever have (as a percentage of income) – yet most financial articles concentrate on the 30-40 year olds who have no disposable income.

    Why should people trust financial advisers? In my experience, they don’t believe what you tell them; they come up with (what always seems like) fairy tale predictions of how much you will have if you follow their plans; they don’t advise you about useful things like salary sacrifice (and when I decided to salary sacrifice, my employer insisted that I had an authorization from a financial adviser to proceed); they don’t tell you any of the negative side effects of their advice; AND they don’t follow up on your money (one financial adviser didn’t realize that over $40,000 was missing for several years – even though it meant a lower commission for her). Even the regulators say that financial advisers generally give poor advice! Given my experiences, is it any wonder that my generation don’t get financial advice? I have finally found a financial adviser that I trust, but most of the others…

    It was interesting that overseas holidays were in both the list that people least wanted to give up, and the list that people were happiest to do without.

  2. Gordon Siebrecht says:

    Hello Trish

    I wish to add the the article “Baby boomers in denial says survey”

    •No need for financial advice

    I have sought advice and found that fees and charges were not to benefit me, but the financial advice Business.

    •Handle their own affairs

    I have been to many seminars from different organisations and this has educated me to have a clearer understanding, but once again they were after control of my funds and assets.

    •Too expensive

    This is the main reason to handle my SMSF as costs by others “Super businesses” would calculate fees on the gross amount of the assests not the standard fees for actual work by the hour plus actual costs of audit fees.

    •Not trustworthy

    I lost confidence in “Super businesses” after going through a process on have a Finanical report created at great expense, and then paid addition cost to not go ahead with it as the yearly cost was going to reduce my returns on investment by 25% due to how they calculated their costs on the basis of my total value of my assets within the SMSF.
    They also were of giving advice to have my other investments outside of the Super Fund to be moved into the Super Fund to which I see more or my returns going to their Business

    I Now find when starting my SMSF the software to manage day to day record keeping is the next big hurdle as my investigation is to find that either I pay a large amount $ to be online with companies software program or the software to buy is only good for 12 monthly registration not as I expect for record keeping only, as the program was for all requirements of recording and reporting to ATO.

    This software matter I am hoping will be created and become available by a Business or someone out there, as I use an accountant for my end of Finanical Tax reporting only.
    From available software found there does not seem to be a program that meets the need for record keeping and create a report to pass onto an accountant for end of Finanical Tax reporting to ATO.

    I have appreciated your web site for the information has been of great educational resource in the last 12 months

    • Hi Gordon
      Many thanks for your interesting comments and taking the time to share your story. We are very pleased that you have SuperGuide useful.

  3. Wendy Donald says:

    I have moved in and out of retirement over the past 12 years. I am close to 66 now, and am working full time in my own retail business, and looking at taking up one day a week part time professional work again.

    Your article mentions baby boomers being responsible for family members, and this is my case as well – a single parent son and grandchildren that I must partly provide for (including housing). I have a SMSF I am about to close down, partly due to GFC but also because in 3 years of actual retirement I had to draw down so much to fund our life that the assets left don’t justify the staggering charges. Another reason is the everchanging rules related to SMSF and finding myself ‘not complying’ when I have tried hard to do the correct thing. The worry of this has been too much. I have planned and planned and yet find myself in a poor position.

    I have now developed a new strategy, and about to implement this. This involves me having direct investments in small rental flats in London (something I have always been involved with), paying whatever tax is due. With a high dollar I am just about to acquire a 3rd flat that will cost me under $200,000 with a return of 8% gross. Eventually the dollar will fall and the sterling pound will rise again and I will benefit in two ways, the first is that the value of my assets in dollars will increase and the value of my rental income will also rise again. For the present I subsidise my life with earned money.

    I can say in the years I have planned for retirement I have sought advice but have found little to none of it of any benefit to me at all. Reading up myself probably gave me the only useful information I have found. Your news letters have been major source for me.

    What has amazed me is the almost total lack of planning, ‘head in the sand’ that some of my friends have toward a retirement that is now with them. They have left work without ever putting in any more than compulsory super, and because they have lined up some part time work for retirement seem to think that they can suddenly adjust from a salary of $85,000 to the Centrelink Aged pension and a bit of part time work. Their expectations are still they will maintain a similar lifestyle to that they had while working.

    • Hi Wendy
      Thankyou for taking the time to share your story with our readers. Well done with your flexible approach to retirement and your courage in overcoming obstacles.

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