94 per cent of Australians aged 18 to 54 are concerned or extremely concerned about the cost of aged care and almost half of those (44.6 per cent) are aged 18 to 34yo, new research from Aware Super has found*.
With the average cost for an accommodation deposit in an aged care facility sitting around $470,000^, this biggest retirement expense, usually arriving decades after finishing work, needs to be planned long before retirement, but is missed by many working Australians.
As the cost of living rises and Australia’s population ages, Jacki Ellis, Head of Retirement at Aware Super, says the need to engage with your super, to plan for the entirety of retirement, is imperative.
"We always need to remember that retirement is about how we live our lives in the years after we finish full-time work and is deeply personal. With the insights of more than 100,000 retired members to guide us, when we look at when retirees use their super we see three definitive stages,” says Ms Ellis.
”Those stages: ’go-go’, ’slow-go’ and ’no-go’, map out the course of what life in retirement looks like for Australians, and importantly, how much each of those stages could possibly cost.
“Our member insights helped provide rich information to best inform our online calculator, My Retirement PlannerTM because we know that retirement is personal and therefore a savings projection needs to account for any and all possibilities," says Ms Ellis.
"Initially, when retirement is new, it's the 'go-go' stage, a time new retirees tick off the adventure bucket – whether that be travelling or exploring, volunteering or learning. Then we see the 'slow-go' stage, focused on community and settling into the routine of retirement, and finally, the 'no-go' stage where age becomes a factor and people may need more assistance to get the best out of life.
"The more we understood about retiree lifestyles and the trends in members accessing their super, the more we saw it vary but show consistency at each stage. We understood the importance of a tool that allows for personalisation as well as predictive, individual and tracked balances.
"For some retirees, spending starts relatively high, retirement is new and coincides with the highest accumulation balance you'll have, so booking a trip is easier and an exciting thing to do. Most people can comfortably imagine what the beginning of retirement will look like, even if that's 20 years or more away.
"Then we see a slight dip in the bell curve trend when retirement life settles and 'newly retired' becomes retired, and expenses aren't usually too much more than the day-to-day of keeping the lights on.
”But it's at the no-go stage or veteran retiree, we often see another spike, that could represent a large sum of money, such as a deposit for an aged care residence or large medical expenses. These costs often hit at a point in time when a large portion of a retiree’s super may have already been depleted – so planning for this possibility is even more important.
"Over the last nine months, we've seen more than 57,000 of our members accessing our purpose-built My Retirement PlannerTM, resulting in more than 37,000 Statement of Advice being issued.
"Using the insight from our members has meant we've been able to create a tool that we can now make available to all Australians, to best help them prepare for retirement. Our member insight and our research, tell us it's abundantly clear that the concern around the cost of retirement, and aged care, is real.
"With 80 per cent of those members saying they would use the tool again and an average confidence score** over 70, we wanted to ensure all Australians had access to super advice at no extra cost, to help alleviate some of the concern they're feeling about decades down the track," says Ms Ellis.
Aware Super's My Retirement PlannerTM is now available to all Australians, via the link here.
*Aware facilitated research through Pure Profile, January 2024.
^How much does a nursing home cost in Australia? (agedcaredecisions.com.au)
**Understanding Your Retirement Confidence Score | Aware Super - Australian Superannuation Fund
About us:
Meet Aware Super - the multi-awarded super fund. They're here to help their members grow their savings, whether retirement is 2 or 20 years away. As one of Australia’s largest profit-for- members funds, Aware Super always remembers whose money it is and whose future they’re looking after. Along with super returns of 8.97% p.a.* (High Growth option over 10 years to 31 March 2024), and expert super advice and guidance for right now, it’s what makes them super helpful.
SuperRatings Fund Crediting Rate Survey, March 2024; SR50 Growth (77-90) Index. Past performance is not an indicator of future performance.
Visit aware.com.au
