Personal savings key to retirement

Nearly 80 per cent of Australian investors view retirement funding as a personal responsibility despite the mandatory superannuation system, according to a survey.

The ‘2017 Natixis Global Asset Management Individual Investor Survey’ found 94 per cent of Australian investors thought personal retirement savings were vital for funding their retirement, while 21 per cent of Australians were concerned about outliving their assets, compared with 11 per cent worldwide.

Natixis managing director, Kevin Haran, said: “One of the reasons investors are concerned about outliving their assets is that they are realistic and well-informed when it comes to understanding how much they will need in retirement”.

More than three-quarters (77 per cent) of Australian investors said they were aware of how much they needed to save in total, while 72 per cent knew how much income they would need to fund their lifestyle in retirement compared to 69 per cent globally, and 71 per cent knew how much they needed to save each year, compared to 68 per cent globally.

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However, the survey of 8,300 investors globally found inconsistencies between what Australian investors said and what they did when it came to investment strategy and their appetite for risk.

Three-quarters (76 per cent) of Australian investors said they were willing to invest in alternatives for portfolio diversification but only 39 per cent actually did so.

“Part of the reason may be that, as an industry, we haven’t explained alternatives well. There may be some misunderstanding about their role in portfolio construction,” Haran said.

“For example, 70 per cent of Australian investors (compared with 66 per cent globally) think alternatives are riskier than traditional asset classes, and 63 per cent say they are too complicated to invest in,” Haran said.

Meanwhile, only 59 per cent of investors trusted financial institutions, while 93 per cent trusted their financial adviser, the survey found.