According to National Seniors Australia, roughly half of Australians over 50 have made financial plans anticipating a longer life. That leaves half that haven't.
A new report has shown that 85 per cent of the over-50s surveyed were aware that their life expectancy has increased by roughly six years over the past three decades, while 22 per cent haven’t planned at all for an increased lifespan.
The study has also found only three per cent have planned on spending more later in life, 61 per cent planned on spending the same throughout, and 36 per cent planned on spending more early on, which suggests a large number will run out of money.
The report states that two thirds of those surveyed planned on spending the same throughout are treating retirement income as a steady wage, which may not cover the latest periods of their life.
The report has suggested a new form of guaranteed income stream in retirement, with roughly 56 per cent of respondents supporting two possible options; compulsory saving at retirement and superannuation insurance.
John McCallum, the report's author, said there is limited availability of financial products that are able to assist individuals in effectively managing the risk of outliving their savings, even if people want to plan. Thirty-five per cent of respondents are undecided on the superannuation insurance model they will use in retirement.
Respondents who demonstrated a greater disposition for vulnerability later in life showed the most support for the options.
The report states that this implies those who support them are likely also those who have less ability to fund the options at the time of retirement. Dealing with these issues during working life will be easier than dealing with the negative impacts at retirement, with women being particularly at risk.
The vulnerable groups have an over-representation of women who would benefit from these options. Women have been shown to have both greater vulnerabilities than men and a preference of superannuation protection options, the report states.
McCallum writes Australian appear to currently be hoping for the best but will need help in planning for the worst.
The study surveyed 5,770 National Seniors members around Australia.