The old saying is "money doesn't buy happiness" but a new survey reveals it does if you're retired.
A fear of running out of money in retirement is top of mind in pre-retirees, women and unmarried people aged 60 and over, research finds. But widespread worry about financial matters is more pronounced in people who haven't sought professional advice.
It comes when cost of living is high and there is a housing shortage.
The 2024 Challenger Retirement Happiness Index aimed to find the drivers of happiness in retirement. It was a collaboration between retirement income provider Challenger and independent research house YouGov. More than 1000 Australians aged 60 and over were surveyed in February 2024.
Among the factors considered were mental and physical health, social connections, purpose, activities and financial wellbeing.
Activities and hobbies were areas people thrived in (79.5 per cent) followed by mental health (77.6 per cent).
Physical health (61.5 per cent) and financial stability (56.3 per cent) were flagged as areas with the most potential for improvement.
Providing retirees with the confidence to convert their retirement savings into a regular income can materially improve their quality of life, supporting better retirement outcomes as well as benefiting broader society and the Australian economy.
- Challenger representative Mandy Mannix
Physical health was the top forward-looking priority in retirement, followed by money and mental health.
Other factors included social connections with family and friends, knowing they had enough money to last retirement, enjoying hobbies, having a purpose in retirement and being able to travel.
The top three concerns about getting older were - in order - losing physical health, losing mental sharpness, and running out of money.
Demographics, financial confidence and retirement happiness
Women, pre-retirees and unmarried people had more money worries than their male, retired and married counterparts.
For example, the former groups were more inclined to say the rising cost of living made them more worried about running out of money in retirement compared with the latter groups.
They were also likely to say they'd be happier if they didn't have to worry about money in retirement.
Pre-retirees were more likely than retirees to say they'd be happier if they had a guaranteed income for life in retirement.
Retirees were more likely to have downsized already, with the main drivers being that smaller properties were easier to manage (63 per cent) and less space was needed (55 per cent). But freeing up money to pay off the mortgage, invest or spend, lower bills and lower monthly mortgage or rent payments were also factors.
Why financial education is important
People who hadn't received professional financial advice (40 per cent) were more likely to worry about the cost of living's effects on their retirement compared with those who did talk to an expert.
Challenger representative Mandy Mannix said she knew the fear of outliving savings is a growing concern among older Australians.
"Providing retirees with the confidence to convert their retirement savings into a regular income can materially improve their quality of life, supporting better retirement outcomes as well as benefiting broader society and the Australian economy," she said.
Read the full report at challenger.com.au/ and search for Challenger Retirement Happiness Index.
