Australia (PRWEB) August 17, 2012
According to a recent study by the Centre for Pensions and Superannuation at the University of New South Wales, most people between the ages 50 and 74 have what they termed a “surprisingly poor” grasp of how to maximise their retirement income.
The survey covered 920 people – 432 of them were still working, while 488 were retired. The majority of those surveyed didn’t know how much their age pensions were worth, and knew nothing about lifetime annuities or allocated pensions.
According to Dr Hazel Bateman, who directed the survey, “People were basically clueless about the features of retirement products. “ The results of the survey were so stunning to researchers that some informally called it “Retirement Incomes for the Dazed and Confused.” A full 25% of those still working, admitted that they hadn’t even considered retirement or any of its ramifications.
One prevailing theme was that the system is too complicated for most people to understand. According to Dr Bateman, “Government and the industry should pay more attention to making superannuation understandable to ordinary people.”
The group of people who are over the age of 47 now face potentially tough going when they retire. Because superannuation doesn’t fully kick in until 2032, most of the “baby boomer” generation won’t receive full benefits. They will receive an age pension, but only 20% of them correctly answered that the amount of the age pension is 25-30% of their wages.
The survey projected that those who are already retired will have used their funds by the time they reach age 75. Since life expectancy is now closer to 85, this will leave many retirees with only their age pension and their houses for an average of ten years.
According to the study, close to 50% of those surveyed knew nothing about allocated account-based pensions, even though they hold roughly half of all retirement fund deposits. Almost nobody knew that an annuity provides a fixed income.
Pauline Vamos, Association of Superannuation Funds of Australia CEO, has gone as far as to say that she wants the government to force these funds to tell members their projected monthly retirement income on their annual statements.
David Domingo, CEO of Members Alliance, summed it up succinctly: “The system is too complicated for the average citizen, but that is no excuse for not knowing where your money is going to come from when you retire. Instead of waiting for the government to act, people need to act now, get professional help, and start planning for their retirements now. For many, retirement will be here before they know it. Nobody wants to wake up one day and find out they don’t have enough money to enjoy their retirement.”
Members Alliance Australia is a leading financial services business focused on helping clients gain financial freedom upon retirement. Their services include debt conversion, debt reduction, wealth creation, property investments and retirement planning. They are experts at managing pensions, annuities, and superannuation funds to provide a comfortable retirement for their clients.
Plan your retirement today before it’s too late – call Members Alliance at 1300 365 731 or visit their website and fill out the Contact Us form: http://www.membersalliance.com.au/about-us.