Australia's Barriers to Proactive Retirement Planning Revealed

Australia has a fundamental problem in its approach to retirement planning.

The Australian superannuation system has become the primary means for workers to save for retirement, but Best Financial Planners has found that financial illiteracy prevents many Australians from optimising their savings and growing their nest egg. 

Through their research, financial specialists at Best Financial Planners have discovered that despite only 27% of Australians reporting to have ever received financial advice, consumers are still eager to seek financial guidance. But barriers like a low level of financial literacy – especially among women and lower socio-economic groups – stand in the way. 

Research shows that younger Australians, in particular, lack a strong understanding of key financial concepts. The gap between generations is evident"while older Australians (over 65) exhibit a much stronger grasp of financial principles, younger generations are left behind.


Australia's gender gap in financial literacy is also stark, with women demonstrating significantly lower financial knowledge than men. According to research, only 34% of Australian women understand the three measured tenets of financial literacy, directly resulting in lower retirement income on average compared to men. 


Over time, policymakers have increasingly shifted the responsibility of retirement savings onto individuals rather than relying on employer pension schemes or government-provided pensions. However, these revealed financial illiteracy rates demonstrate self-efficacy is a failing solution, which leaves generations of Australians underprepared for retirement.

A large majority of Australians (75%) also find the retirement system complex. Without the knowledge of how to effectively manage and optimise their superannuation, many consumers are delaying retirement, pushing the retirement age further back nationwide.

To address Australia's retirement planning crisis, Best Financial Planners asserts that Australians need to boost their financial literacy by educating themselves about the fundamentals of financial management. Younger Australians, women and those of a lower socio-economic status, in particular, need to take an active role in their financial futures to safeguard themselves against the literacy gaps and the government's relaxed attitude to increasing the pension age. This begins with taking the necessary steps to increase knowledge about their retirement options and seeking professional financial advice sooner rather than later.

As a nation, we seek financial knowledge too late, when the pressure of retirement is looming, and not in our early careers, when it can make a significant difference.

https://bestfinancialplanners.com.au/