Retirement is a dynamic phase of life, evolving beyond the traditional boundaries of work and leisure. To better understand this transformation, in collaboration with fiftyfive5, part of the Accenture Song group, we commissioned a qualitative research piece focusing on pre-retirees and early retirees' needs and motivations.
This research aimed to deepen our understanding of pre-retirees and early retirees by exploring their lives, financial needs, motivations, and approaches to achieving their retirement goals. We also sought to understand members’ reactions to integrated retirement income solutions and explored and tested the features that resonated most with members. This article seeks to summarise the key findings from this qualitative research.
The Five Headlines
The research unearthed several key insights:
- Retirees are focused on protecting what they've built and growing it further where possible.
- They seek permission to spend, particularly during the early "golden years" of retirement.
- A distinct income stream is valued as an enhancement to their superannuation, seen not as a safety net but as the "icing on the cake."
- Retirees prefer accessing additional income streams through their super fund, their trusted one-stop retirement partner.
- Members are most receptive to product solutions in pre-retirement when they are establishing their retirement plans.
The Journey of Retirement
Retirement today is no longer a clear division between work and leisure. It's a journey that reflects individual desires for work-life balance. We identified three broad archetypes:
- The Slow Transitioner: Gradually winding down over years, moving from full-time to part-time work.
- The Stop Starter: Alternating between work and leisure, enjoying work but seeking balance.
- The Stepping Stoner: Combining major life changes like downsizing with shifts in roles.
Even within these modes, personal circumstances drive behaviours. The process of retirement is often not a single point in time; it spans years and varies for each person.
Focusing on Early Retirement Years
Most retirees focus on the early years of retirement, seen as the "golden years" from ages 60 to 75. These years are filled with travel, hobbies, and experiences. There's a pressure to enjoy life now, while mobility and health are favourable. However, retirees often hold back, seeking permission to spend due to a lack of financial confidence.
The later years, from 75 to 90 and beyond, receive less attention. Retirees believe money becomes less important as life simplifies, relying on the Age Pension or liquidating assets if needed. Emotional discomfort often prevents engagement with this stage.
Building Financial Confidence
Retirees prioritise building financial confidence over achieving financial certainty. They feel good about their superannuation and property gains but worry about missing out on retirement dreams due to life's unknowns. Financial certainty feels unattainable, so they focus on taking pragmatic steps to build a confident retirement.
Protecting Financial Assets
Retirees are protective of their money, intensified by concerns about scams, market volatility, and risky investments. They approach new financial products cautiously, seeking trust and understanding. Established providers with a strong and recognised brand like Allianz offer reassurance and protection.
Solving Retirement Challenges
We identified the following problem statement: ‘ I want to maximise my early retirement years, so I’m looking for more confidence that my retirement plan is set up to support this dream. I’m looking for the freedom to spend, protect what I have built, with flexibility to change over time.'
Exploring Retirement Solutions
Members responded positively to the idea of a distinct income stream enhancing retirement, offering protection and control, and accessed through their trusted super fund.
Timing of Communication
Members are more receptive to retirement income propositions before retirement, during the planning phase. Pre-retirees are eager to consider products, while retirees wish they had been available earlier, when they were setting up their plan. Despite responding positively to a retirement income solution presented to them, retirees in their later years were reluctant to consider this for themselves as this would involve re-evaluating their retirement plan.
Summary: A Great Retirement Proposition
A great retirement proposition offers members protection, maximises future income, and adapts to life changes. It provides confidence, freedom, and control, ensuring a fulfilling retirement journey.
As we continue to explore and innovate in the realm of retirement planning with super fund partners, these insights serve as a valuable guide for co-developing solutions that truly resonate with retirees and pre-retiree members alike.
