Australians planning to work longer to achieve retirement satisfaction: Fidelity

More Australians are moving away from the dream of early retirement, with pre-retirees planning to work long after the age of 67, according to a new report.

Fidelity International has recently released the new report Retirement: The now and the then, which was undertaken to help advisers better understand their clients’ views on retirement and their main drivers of life satisfaction. 

The report identifies best practice principles for improving clients’ financial wellbeing and retirement satisfaction.

Richard Dinham, head of client solutions and retirement at Fidelity International, said that the new research has found that more Australians are planning to work longer and not just because of financial considerations.

“Respondents are continuing to work later in life because they enjoy it, it allays boredom, and it provides a sense of purpose,” Mr Dinham said.

“It seems that retirement for many Australians is becoming more of an emotional journey. The research found that Australians who felt they were in control of their retirement decision had more positive emotional outcomes compared to those who were unexpectedly forced into retirement.

“The research also found that life gets better as people move through retirement. Although satisfaction with health declines, people gain more satisfaction in retired life through a sense of community, a sense of control and positive daily experiences.”

The research found that a good life in retirement comes down to a combination of factors that can be summarised as the six Cs, namely: circumstances, character, connection, control, confidence, and capability.

“All of these elements are important; they are not independent of each other,” Mr Dinham noted.

Although there is more to life than money, the research also found having a solid financial bedrock for retirement contributes to life satisfaction.

This is an important consideration for financial planners as it indicates their role is evolving, as they have to also take into account their clients’ overall emotional wellbeing and how that ties into their finances, according to Mr Dinham.

Financial advisers can also contribute to their clients’ sense of control and confidence by using investments that are suitable for the needs of retirees, investments that are “fit-for-purpose”.

“Whilst retirees still need to take some investment risk with their portfolios, fit-for-purpose investments provide exposure to the right kinds of investment risks and, importantly, at the same time help reduce the extent of those investment risks that the client would normally be exposed to,” he explained.

“For example, volatile equity markets can actually benefit regular savers by the effect of dollar-cost averaging – some contributions are invested when markets have fallen and the subsequent recovery boosts overall returns. 

“However, the opposite effect occurs for retirees with dollar-cost averaging potentially being very harmful, as any capital drawn upon during volatile markets can mean a permanent loss of capital. So, to avoid this harmful effect, planners need to use an appropriate framework for investing combined with the right kinds of investments. 

“The research also found that pre-retirees and retirees with an active relationship with a financial planner suffer less financial stress, feel more confident and resilient, are better informed about money matters, have a greater sense of control, are more optimistic about the future and are generally happier than the unadvised.”

Tony Zhang

25 November 2021

 

smsfadviser.com

 

Any advice contained in this website is of a general nature only and does not take into account your circumstances or needs. You must decide if this information is suitable to your personal situation or seek advice.

Rolanda has been my financial adviser for 20 years. I have always found her to be highly intelligent, knowledgeable and professional in her career. Rolanda is accessible at all times and patiently explains terms that I do not fully understand. I can highly recommend Rolanda and it is a pleasure to do so. I do this with the utmost confidence. Marcia Montgomery (Retiree – home duties and ex-clerk with Water Board)
I retired Oct 2012, and seeking Financial Advice for my retirement funds, I decided to have Rolanda look after my financial affairs, and so happy I did. Since my retirement I am extremely comfortable with Rolanda’s advice, experience and strategies and the returns on my investments. Rolanda is my "Breath of Fresh Air" at this stage of my life and she makes herself available 24/7 should you need to talk with her. Steve Hoad (Ground Engineer, Qantas)
In 1997 I left Energy Australia and decided to join Rolanda Adams Financial Services for the financial support and advice that I would need into the future. That decision has proved a very good one and I am still with Rolanda who has given me advice and friendship over those many years. The advice given has ensured that my investments have been protected and the major losses, of some, during the GFC was not felt by me unduly. Rolanda and her team are very easy to contact at any time and one is always received in a most professional manner. I would be most happy to recommend Rolanda Adams Financial Services to all who need financial services. Graham Fleeton (Manager, Property Insurance Group Energy Australia (Ausgrid))
Rolanda has been my Adviser for the past 18 years. Through her wide industry experience and professional expertise she has ensured the sound development and ongoing management of my investments. Her advice has invariably been sound, timely and entirely tuned to meet my personal needs in retirement. She has a friendly, engaging manner and is always readily available to address any of my concerns. I have no hesitation in recommending her. Neil O'Keeffe (Chief Inspector (retired), Australian Customs Service)

© 2022 Rolanda Adams Financial Services Pty Ltd. All rights reserved. Site by PlannerWeb.