Almost one-third of Australians aged 55 and over are fearful about their financial futures and believe the pandemic will delay their retirement, according to new research.
The University of South Australia (UniSA) – in conjunction with RMIT University, the Council on the Ageing (COTA), retirement living provider ECH and the Ecstra Foundation – has published a report examining the financial behaviours, psychological wellbeing and financial decision-making of 1500 older people during the pandemic.
The results show that COVID has negatively affected the retirements of older working Australians. For those not yet retired, the survey showed that 12.3 per cent believed they would have to delay full retirement and 9.1 per cent believed they would need to make early cash withdrawals from their superannuation.
Overall, those aged between 55 and 64 reported being less satisfied and less secure about their financial futures.
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The results show an alarming number of older Australians need to improve their financial capability and literacy before they reach retirement, the report notes.
“Older Australians are disproportionately vulnerable to the financial consequences of COVID-19 and as a society we need to recognise and address this,” says Dr Braam Lowies, lead author of the study.
“While many pre-retirees are uncertain about their financial situation, women are particularly at risk with nearly a quarter indicating that they felt worried about making mistakes relating to investments, and 20 per cent saying they felt nervous about planning financially for their retirement.
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“We have an obligation to ensure our citizens are appropriately educated, supported and informed about their financial futures, but especially those who we know are more vulnerable.”
The research has developed a three-step process known as Pause, Reflect and Connect for older Australians to reduce money-related stress and make better financial decisions.
The process asks older Australians worried about money to pause to relieve some of the immediate stress; reflect on and consider the situation they are experiencing and decide what action to take next and, finally, connect with trusted sources or resources to assist them to make the best decision.
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Study co-author Professor Kurt Lushington says targeted resources such as these will benefit older Australians and help them better understand their finances.
“Pause, Reflect and Connect is a resource that aims to help older people consider their financial situations with a clear headspace, all the while remembering that they can connect with trusted others for advice or help,” Prof. Lushington says.
“As people age, they tend to become uneasy about all sorts of things. If we can help alleviate some of this anxiety, especially in relation to financial concerns, then that’s absolutely worthwhile.”
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