Retirement regret: What 1 in 4 Aussies wish they'd done after quitting work

It's not what you think!

Elderly couple look sideways at each other in mild disagreement

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are 4.2 million retirees in Australia today, and according to new research by life insurer TAL, 28% of them wish they'd spent their money more freely and enjoyed the early years of their retirement more.

A further 16% wished they'd worried less about saving their superannuation for a rainy day.

TAL has just released a research paper documenting what retirees wish they'd known before retiring.

Let's delve deeper and discover the lessons this provides for pre-retirees still in the workforce today.

Retirement regret 1: Not planning well enough

The research shows 22% of current retirees are concerned their superannuation monies will run out. This has led to financial stress among 32% of retirees aged over 80 years as they draw down their savings.

The AFSA Retirement Standard provides guidance on how much Australians need for retirement.

It says Australian couples need $690,000 in superannuation, and singles need $595,000, plus full home ownership and a part-pension, to afford a 'comfortable retirement'.

Alternatively, just $100,000 in superannuation for couples and singles, plus a part-pension and full home ownership, is enough for a 'modest retirement'.

These figures assume retirees draw down their super capital and invest it with a return of 6% per annum.

According to the Australian Bureau of Statistics (ABS), superannuation is the main source of income for more than one in four retirees and at least one source of income for almost 40% of retirees.

Retirement regret 2: You may be forced to retire early

Many people expect to retire between the ages of 65 and 69 but 59% retired earlier, according to TAL.

This reinforces the need to plan ahead financially, as you may not have until your 60s to get organised.

A new report from the ABS reveals four of the top five reasons for retirement involve unforeseen circumstances. Examples include redundancy, injury, or having to care for someone else.

Ashton Jones, General Manager of Growth, Retirement & Wealth Partnerships at TAL, said:

When retirement arrives sooner than expected, it can derail a person's ability to prepare as much as they'd like to.

Some common themes that emerged for retirees were that many wish they'd put more into superannuation when they had the chance, or that they'd started salary sacrificing earlier.

Financial advisory Findex says more than one in two Australians are unaware of the significant tax savings available through salary sacrificing or making extra personal contributions to their superannuation.

Retirement regret 3: Not expecting to live this long!

The TAL report reveals one-third of retirees expect to live longer than they anticipated when they first retired. TAL says this highlights the benefits of retirement products that pay an income for life.

Upon retiring, Australians typically take one of five actions with their superannuation nest eggs.

The most popular choice is converting super into a regular income stream via a pension account (34%). A further 27% left their money in their existing super account. A lump sum was taken by 15%. Finally, 18% moved some or all of their super monies into a lifetime retirement income stream, like an annuity.

Were retirees happy with the decisions they made?

With the benefit of hindsight, it seems many people would have made different financial choices in retirement.

The research showed 56% of retirees who withdrew all or most of their super were happy with that decision.

By contrast, 87% of retirees who moved their money into a lifetime income stream or pension account were happy with that call.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Retirement

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Retirement

How to build a winning retirement portfolio with ASX shares

Analysts see these shares as great options for retirees in 2025.

Read more »

Happy couple enjoying ice cream in retirement.
Retirement

2 of the best ASX 200 blue chip shares to buy for a retirement portfolio

Analysts at Bell Potter rate these shares very highly. Here's why they could be top options for retirees.

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Retirement

Retirees: 2 cheap ASX dividend shares to buy in February

These stocks offer both yield and compelling value.

Read more »

Two elderly people smiling with their fists pumping and with a cape on.
Retirement

4 steps to take now to get the maximum benefit from your superannuation

Taking these simple steps could materially boost your superannuation returns.

Read more »

A young well-dressed couple at a luxury resort celebrate successful life choices.
ETFs

Want $1 million in retirement? Look at 3 simple ASX ETFs to buy and hold for decades

Retiring wealthy doesn't need a complicated investment strategy.

Read more »

Happy couple enjoying ice cream in retirement.
Retirement

Why these ASX retirement shares could be top picks in January

Retirees might want to check out these shares that Bell Potter rates highly.

Read more »

Woman at home saving money in a piggybank and smiling.
Retirement

Analysts say these fantastic ASX retirement shares are buys

Here's why these top shares could be great picks for retirees.

Read more »

An older man wearing a helmet is set to ride his motorbike into the sunset, making the most of his retirement.
Superannuation

What is considered a good superannuation balance for my age?

There's an easy way to find out.

Read more »