Helping retirees with the mental shift from accumulation to decumulation is a key role for financial advisers as they see the opportunity to help the retire-ready market, according to Vanguard.
Speaking at a Vanguard webinar, Jeremy Duffield, who founded Vanguard’s Australia and Asia divisions, said three particular factors were contributing to the need for advice for retirees.
There were 250,000 people retiring each year and 3.9 million aged over 65 in Australia, he said.
The three reasons were growing numbers of older Australians, insufficient numbers of advisers and signs that the regulatory framework was helping retirees.
A particular mental problem stemmed from the mindshift from accumulating assets to spending those assets.
“Retirees need help in tackling this transformation, it’s a tough transition going from being an accumulator of assets throughout your career to creating a retirement income stream. That’s one very big mental mind shift.
“Everyone has to align their retirement life with their financial situation, their own financial reality and that’s very hard to do. It is a challenge to work out how long your money will last and how much you can afford to spend. That’s why people need financial advisers.”
The $300 billion fund has announced the development of a new flexible lifetime income option in partnership with TAL.
As regulators spur funds to focus on Australia’s ageing population and overseas players voice their interests, professionals expect a boost in innovative activity in super.
Over half of Australians hope to live to 100 years, according to MetLife, and 90 per cent believe retirement should be redefined to account for a longer lifespan.
Two actuaries have urged for an overhaul of the current retirement framework to better prepare Australians for the future and improve the accessibility of general financial advice.
Add new comment