Retirement Happiness in 2024

Written on the 12 April 2024 by Parkside InvestorPlus

For the hordes of Australians now approaching their retirement phase, this group of people are now faced with ever increasing complexities of retirement with a mix of hope and trepidation – after all, there have been so many changes in legislation to retirement and the question is that how can you stay on top of these changes, and more importantly, do you know what’s right for you.

The 2024 Challenger Retirement Happiness Index, a study that delved into the hearts and minds of these seasoned individuals, revealed a score of 70, highlighting the intricate relationship between financial well-being and contentment in the twilight years.

The study, which surveyed over 1,000 Australians, painted a clear picture of a generation grappling with the uncertainties of retirement.

More than two-thirds (72 per cent) of the respondents expressed a profound wish: if they didn't have to worry about finances, their happiness would soar to new heights (Challenger Retirement Happiness Index, 2024).

A staggering 42 per cent strongly agreed with this sentiment, highlighting the link between financial security and retirement bliss.

However, the pursuit of contentment extended beyond mere finances.

Education emerged as key factor, with a resounding 77 per cent of respondents indicating that access to financial education and guidance would positively impact their happiness (Challenger Retirement Happiness Index, 2024).

This finding echoed the sentiments expressed by Mandy Mannix, Challenger's chief executive for customer, who emphasised the industry's responsibility to safeguard the golden years of retirees and foster a better, happier retirement experience.

Mandy’s words resonated with the survey's findings, as she stated, "Reassuringly retirees felt their happiness would improve with access to the right financial education, as well as support through financial advice and a regular income to enjoy a safe, stable retirement.

This would empower retirees with the confidence to spend and capacity to pursue their passions."

The study also shed light on the disparities between those who sought financial advice and those who didn't.

Unadvised Australians were more likely to cite the rising cost of living as a significant impact on their financial security (39 per cent) compared to their advised counterparts (25 per cent) (Challenger Retirement Happiness Index, 2024).

Nonetheless, the spectre of rising costs and affordability loomed large, with two-thirds of Australians over 60 indicating its impact on their confidence in having enough money for retirement.

This finding echoed the observations of State Street Advisors' Global Retirement Report in January, which noted a weakening of confidence measures despite a dramatic reversal in markets in 2023 (State Street Advisors Global Retirement Report, 2023).

Among the top factors influencing Australians' retirement decisions were inflation and cost of living (73 per cent), while a startling 50 per cent of respondents expressed a lack of confidence in their ability to retire as planned (State Street Advisors Global Retirement Report, 2023).

Not surprisingly, running out of money in retirement emerged as a primary concern for older Australians, surpassed only by fears of declining physical health and mental sharpness (Challenger Retirement Happiness Index, 2024).

Unmarried Australians were more likely than their married counterparts to rank "not having enough money to do what they want to do" as a top-three concern about aging.

In the realm of retirement, where dreams and realities collide, the pursuit of happiness is inextricably linked to financial security and education.

As the golden years beckon, the findings of the 2024 Challenger Retirement Happiness Index and State Street Advisors' Global Retirement Report serve as a clarion call for the industry to prioritise the well-being of retirees, empowering them with knowledge, guidance, and the tools to transform their hard-earned savings into a fulfilling, worry-free retirement.

So, what’s the key takeaway from this?

Seek professional advice and do your best to become educated on your financial future – this means knowing what you can and cannot do and how much you now need to live the life you’ve dreamed of.

At Parkside InvestorPlus, we help our clients transition into retirement from a financial and a positive mental perspective. And we have an Aged Care specialist who can provide advice and guide you.

Contact us today to see how we can help this life important journey pleasant and joyful.