This research was undertaken by ASFA with the cooperation of the Council of the Ageing (Australia), the peak community organisation for older persons. The interviews were undertaken by Ageing Agendas.
The research examines some of the dimensions of ‘adequacy’ and retirement income from an individual perspective. It is largely qualitative in its nature, but the research also includes quantitative analysis based on survey and other measures of living costs.
Thirteen face-to-face interviews have been undertaken to date with consumers who have been in retirement for periods of between two and ten years. We sought a mix of retirees on different incomes and with different experiences on their path towards retirement. We asked the respondents to complete expenditure records. We also sought to compare the expectations of retirees against the reality of their experience.
There is no one story. People come from different backgrounds with different opportunities to save for retirement and that helps to shape their expectations. But there are also some clear messages.
Planning for retirement is important. Retirement can either be a compromise or a liberating experience. Where retirement planning has been undertaken, and a person has been able to work up to normal retirement age, retirement can be a period free of restrictions and fulfilling for the individuals concerned. Where these plans have been disrupted (eg poor health, unemployment or forced early retirement) our retirement stories document just how frustrating and disappointing that can be – even for those with relatively modest expectations. If retirement savings are inadequate, or saving plans are disrupted, then retirement can become a period of virtual imprisonment.
Some of the stories touch on other factors. Living standards are greatly affected, where the retiree is in inappropriate housing; is not able to replace household durables; or relying on an outdated motor car, which is important for mobility. People entering retirement do not predict, or cannot predict, their health (and the associated costs). Issues of housing, transport and health care are all related and basic to the questions of adequacy and independence in retirement. So too is the issue of age discrimination if we are to maximise the opportunities for people to work up to customary retirement age and, if desired, beyond.
One of the most significant issues in discussing ‘adequacy’ is to what extent do our benchmarks and targets need to change. ‘Adequacy’ is about expectations and our ability to participate in the society in which we live. Even within the sample profiled in this report there are significant differences between the attitudes of those who had been in retirement for ten years or more, and those who had recently come into retirement. It is likely that the babyboomers and future generations will have higher expectations again.
Section 6 of the report explores some of these issues together with some benchmarks as to lifestyle and needs. Luxuries of the 1970’s are perceived as necessities by the babyboomers. As reflected in these stories the nature of expectations and the nature of loss and disappointment can be quite dramatic if people don’t have enough for retirement.