Changes to super rules greatest fear for investors

Superannuation investors' greatest concern is not underperformance but potential legislative change to superannuation rules, according to a report by State Street Global Advisors.

The Australian Retirement Vision Survey, based on a study of 1,200 super fund and SMSF investors and conducted with Rice Warner, showed that two in five superannuation investors listed changes to superannuation legislation as their greatest concern when it came to retirement savings.

The report showed this figure was higher among older investors, with 44.3 per cent of baby boomers and over half of pre-boomers identifying this as their greatest concern.

The research also showed that Australians overwhelmingly expect their pre-retirement lifestyle to continue when they leave the workforce.

“Across all age groups, 6 out of 10 Australians expect their current standard of living to remain the same after they retire,” said the report.

Expectations also become more realistic as investors approach retirement.

“Generation Y, the segment furthest from retirement, are the most optimistic about their post-retirement incomes, with more than one quarter or 26.9 per cent expecting to be better off after they retire,” said the report.

“In contrast, only 12 per cent of Generation X and 6.2 per cent of baby boomers believe their standard of living will improve when they finish working.”

Pre-retirees are also most likely to anticipate a fall in their living standards when they retire, with 32.7 per cent of Generation X investors and 24.4 per cent of baby boomers saying they believe their standard of living will be worse, rather than better, according to the survey.

SSGA Investment Solutions Group chief executive Dan Farley said the research shows that while many investors are feeling more confident about their retirement prospects, there is still a significant proportion confused about super and are uncertain about whether their investments will sustain the lifestyle they want in retirement.

“Now is a good time to educate workers about the nature of market cycles and how to develop a savings strategy they can stick with even when markets fluctuate,” said Mr Farley.

“Our research underlines the value of professional advice in educating and supporting everyday super investors in setting and achieving realistic lifestyle goals, yet it also shows that many are still uncertain or unaware of the value advice can bring. This creates both a challenge and an opportunity for advisers.”

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