Successful retirement through knowledge
This important information was originally published in the SMSF Association Daily News. It highlights the importance of obtaining superannuation advice and education.
Don't trust your retirement future to chance. Seek the specific, detailed advice needed for a 'successful retirement'.
Customised education vital for retirees
13 Apr 2015
By Elizabeth Somerville
The “2015 Post-retirement Report” found only 29.2 per cent of respondents rated their super knowledge as strong or very strong, which was on a par with 29.8 per cent of respondents in 2014.
Further, only 26.1 per cent rated their super experience as strong or very strong, compared to 27.8 per cent in 2014.
“The knowledge gap is significant,” CoreData principal Andrew Inwood told financial observer.
“It doesn’t really change with [superannuants’ level of] education either, as knowledge in superannuation is specific and detailed.”
The survey also found only a quarter of respondents rated their investment knowledge as strong or very strong, at 26.5 per cent, while a similar percentage, 24.7 per cent, rated their investment experience as strong or very strong.
“Overall, we’ve found there is a low understanding and knowledge of what’s needed to achieve a successful retirement, particularly among pre-retirees,” Inwood said.
“Although awareness that super funds offer advice is up from 59.6 per cent in 2014 to 69.7 per cent this year, less than half (46.4 per cent) of those aware have used the service.
“This suggests a significant opportunity to engage members with marketing that promotes the value of advice at this important life stage.”
In particular, pre-retirees lagged behind post-retirees on super and investment knowledge, which suggested a need for greater education aimed at this sector, he said.
The study also showed 58 per cent of pre-retirees were presently unadvised - 29.5 per cent of whom had never used an adviser, while 28.5 per cent had used one in the past.
This was compared to 46.6 per cent of post-retirees who were unadvised, with 18.5 per cent having never seen an adviser, while 28.1 per cent had seen one in the past.
That situation was partly due to the difficulty funds had in describing the usefulness of an advice relationship, Inwood said.
“When people are paying for a benefit which is more abstract, the focus is on utility cost and what does it cost to participate,” he said.
“Super funds are relatively poor at describing utility of their service.”
As published in the SMSF Association Daily News.
All information provided in this blog is of a general nature only and is not personal financial or investment advice. Changes in legislation occur frequently. We recommend that formal advice be obtained before acting on the basis of this information.
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