Investments, Retirement, SMSF

SMSF member longevity risk concern low

SMSF Vanguard/Investment Trends SMSF report

The level of confidence SMSF members have that their retirement savings will be sufficient to last their lifetime is three times higher than for those without a fund, new research has found.

SMSF members are more confident they will not outlive their retirement savings than non-SMSF members, with three times more trustees expressing no concern about the matter compared to others, according to new research.

The “2024 Vanguard/Investment Trends SMSF Report”, released recently, found 34 per cent of SMSF trustees were completely unconcerned about outliving their retirement savings compared to 11 per cent of the general population.

The figure dropped for SMSF members who were not retired, with 24 per cent stating they were unconcerned, but climbed to 47 per cent of SMSF trustees who were already retired.

Investment Trends head of research Dr Irene Guiamatsia said questions based on outliving retirement savings were included for the first time in the 19-year history of the survey and the results were positive for the SMSF sector.

“With the new definition proposed in the objective of superannuation, retirement must remain front and centre as we consider everything that has to do with super,” Guiamatsia explained.

“So for this year’s research we teased out trustees’ views around retirement and SMSFs are vastly less concerned than the general population when it comes to their retirement prospects.

“The question we asked was, on a scale of zero to 10, how concerned were Australians about outliving their retirement savings. On an average basis it is well below five and is actually 3.8 out of 10 [for non-retired SMSF members].”

This number fell to 1.8 for retired SMSF members and was 2.9 out of 10 for all SMSFs in the survey behind the report.

“This shows these sophisticated investor cohorts feel very well equipped to face any possible challenges that retirement may bring and when they are already in retirement they become more comfortable, with nearly 50 per cent not being concerned at all,” Guiamatsia said.

The report, which was based on responses from 1584 SMSFs collected in February and March, also found a smaller retirement adequacy gap when compared with the general population.

Guiamatsia noted the gap in what people expect to receive in retirement income compared to what is actually received was only 7 per cent for SMSF members compared to 27 per cent for non-SMSF members, “which again highlights that when it comes to retirement how well positioned SMSFs are”.


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