The role of financial security in retiree happiness
Happiness means different things to different people, but according to new research, there are some common themes in what brings contentment to older Australians.
In collaboration with independent research house YouGov, Australia’s leading retirement income provider, Challenger surveyed over 1,000 Australians aged 60+ to understand their retirement happiness and key drivers. The results showed that 65 percent of Australians aged over 60+ said they would be much happier if they didn’t have to worry about finances in retirement. Amid rising costs of living and economic uncertainty, financial advisers can support clients to achieve their financial goals and help deliver peace of mind about the future.
Stability brings smiles
Money might not buy happiness, but the research suggests its stable presence can certainly help increase it in retirement. The Challenger Retirement Happiness Index shows that more than seven in ten Australians aged 60+ believe a guaranteed income in retirement would significantly boost happiness, with more than 40 per cent strongly agreeing. Yet when surveyed on their current state of happiness, financial stability sat at a score of 56 out of 100 overall, bringing it behind only physical health (62%) as the areas with the most potential for improvement in enhancing overall well-being.
Given the current economic climate and rising costs of living, it’s notable but not surprising that so many of those Australians aged over 60+ are seeking financial stability—and that there is a gap between where their sense of security currently stands and where they’d like it to be. Two in three (65%) expressed the pressure of rising costs of living is impacting their confidence in having sufficient retirement funds. For the Australians aged over 60s+ looking ahead to imminent retirement, the impact was even more significant than on those who are already retired.
Australians without financial advice feel the pinch more acutely, with a notable percentage attributing significant stress to the rising cost of living. Respondents who had never received professional financial advice (40%) were more likely than those that received advice (26%) to report that the rising cost of living has had a significant impact on their confidence that they will have enough money for retirement.
Regardless of their past engagement with financial advisers, the majority of retirees surveyed can see the potential benefits of understanding their choices for retirement: more than three in four (77%, or the equivalent of approximately 4.5 million Australians aged 60+) said that education about their financial options in retirement would have a positive impact on their happiness.
Peace of mind
Financial advisers have expressed increased client satisfaction when retirees know their basic financial needs are predictably met, and one way advisers can help do that is through an annuity that offers a guaranteed regular income.
Challenger lifetime annuity payments can be linked to yearly CPI changes, which can offer peace of mind now as well as helping to maintain living standards over the years. By providing a guaranteed regular income for life that adjusts with inflation, retirees can plan for expenses and engage in life-enriching activities, knowing that their needs may be covered regardless of economic shifts. And as part of a diversified retirement plan, a CPI-linked annuity can help reduce anxiety about the financial future, allowing retirees to focus on enjoying life.
Financial security plays a crucial role in retiree happiness for several reasons. For personalized financial advice tailored to your retirement plans and security, why not give us a call to learn more. Humble Goode is here to help.
General Advice Warning:The information on this website is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making an investment decision in relation to a financial product.