Jeremy Duffield

Jeremy Duffield is a senior player in the Australian and international financial services sectors, having served as a senior executive with leading global funds manager The Vanguard Group USA from 1980 to 2010. He founded Vanguard’s operations in Australia and Asia, and led them from 1996 to 2010. Jeremy is Chairman of the Australian Centre for Financial Studies and is a non-executive director of MLC, National Wealth Management and Plum Financial Services. He is a member of the Federal Government’s Australian Centre Financial Task Force and was previously a member of the Financial Sector Advisory Council and the Financial Literacy Foundation. He was also Deputy Chair of the Financial Services Council.
The Age Pension trap: The true cost of working longer

The Age Pension trap: The true cost of working longer

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Any idea which group of workers are paying the highest tax? I’m disappointed to report that it’s older Australians on an Age Pension. We uncovered this disappointing fact while completing research for leading super fund HESTA. The key takeaway was the severe burden on many retirees on a part Age Pension who are earning a wage.  The study, which attracted a lot of media attention, revealed that Age Pensioners can face the highest (effective marginal) tax rates of any group in Australian society.   This is hardly fair.

Today we share a brief explanation of how this anomaly might affect you or your partner. And if there is anything you can do about it.

Reducing retirement anxiety: Building financial confidence

Reducing retirement anxiety: Building financial confidence

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Retirement can be filled with all sorts of new freedoms and experiences.  However, this new phase is not without its anxieties. Research by UniSuper shows that over 90% of Australians have some concerns about retirement, and fewer than 10% feel their retirement is completely stress-free.

A significant source of this anxiety is financial uncertainty. Nearly half of all working Australians (45%) feel they are not financially prepared for retirement, and a similar number (48%) don’t know how much money they will need. A substantial 68% of Australians also worry about outliving their savings. This “fear of running out” can lead retirees to live and spend too cautiously, denying themselves the joys they worked so hard to achieve.

And the worries aren’t just about money. Many people are concerned about the non-financial aspects of retirement. The UniSuper survey found that 61% of working Australians worry about losing social ties from the workplace when they retire. Losing a sense of purpose and identity is also a key concern, which is why 81% of working Australians plan to continue working in some form, such as through a new job, volunteering, or hybrid work.

The financial anxieties often stem from the unasked and unanswered questions that can create significant stress. Questions such as “Do I have enough to retire?”, “How can I make my savings last?”, and “Will I qualify for the Age Pension?” can feel overwhelming. The good news is that these questions can be answered, and the fear can be replaced with clarity and confidence.

Consumer research shows that advice is the best antidote for retirement anxiety. The data shows a critical link between seeking advice and retirement confidence. Around two-thirds of working Australians (66%) who have received financial advice feel confident about how much money they will need in retirement. This is in stark contrast to the 77% of pre-retirees who have not sought professional help and don’t feel prepared. For those who have already retired, 71% of those who received advice felt confident about their next phase of life, and 68% knew how much money they needed for retirement.

This is where services like Retirement Essentials’ advice consultations can make a significant difference. By providing easy and affordable access to financial guidance, we help people put a plan in place to face retirement with confidence.

Is the Age Pension more valuable than you think?

Is the Age Pension more valuable than you think?

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What would you do if you won a lottery prize of $766,000? That’s a life-changing amount of money for most people. What if you found out you could be entitled to even more – over $1.1 million? The good news is you don’t need a winning ticket to receive that kind of financial boost. You could be entitled to that much if you receive a full Age Pension.

While the Age Pension may not feel like winning the lottery –  because you receive it in a stream of fortnightly payments – for many Australians, its lifetime value is equivalent to a very high lottery payment. In fact, as the table below shows, the lifetime value of the Age Pension –calculated to age 92 –  for a full single recipient is $766,100, and for a couple, it’s a staggering $1,155,600. This isn’t just a small supplement; it can represent a huge portion of a person’s total retirement income. For someone receiving the full Age Pension with $150,000 in assessable assets, Retirement Essentials estimates show this might represent 79% of lifetime retirement income.