The escalating cost of living has forced young Australians to take proactive steps to secure their financial future.

According to recent research, conducted on behalf of HESTA, almost half (49%) of Australians aged 18 to 39 have begun actively planning for retirement, including salary sacrificing and using online tools to assess their superannuation trajectory.

The national survey, which sampled 1000 Australians, highlights a distinct shift in financial priorities among younger generations. While 49% of under 40s are now more focused on retirement planning, only 44% of those aged 40 to 54 and 29% of individuals over 55 reported taking similar actions.

HESTA CEO Debby Blakey says these findings indicate a growing recognition among younger workers of the critical role superannuation plays in their long-term financial security.

“It’s heartening to witness younger Australians becoming more engaged in retirement planning,” says Ms Blakey. “Even small changes made early can lead to substantial benefits in the future. For many, superannuation will be their most significant financial asset, and they are observing their parents retire with super balances that provide essential financial stability.”

The survey found that across all age groups, 41% of respondents had intensified their retirement planning over the past year. However, 51% made no changes, and 6% reported reducing their efforts, such as cutting back on salary sacrifice contributions or withdrawing superannuation funds due to financial hardship.

Current economic challenges appear to be sharpening the focus on retirement planning for those under 40, emphasising the importance of early and consistent preparation for a secure financial future.

A key concern highlighted by the research is the fear of outliving financial resources in retirement. Among those under 40, 68% expressed anxiety about running out of money, with 64% of 40 to 54-year-olds and 51% of those aged 55 and over sharing this concern.

Lifestyle maintenance in retirement also emerged as a significant worry, with 52% of 18 to 39-year-olds fearing they won't be able to sustain their desired standard of living. This sentiment was echoed by 49% of 40 to 54-year-olds and 45% of those aged over 55.

The research also highlighted gender disparities in retirement concerns. Women were notably more anxious about depleting their savings, with 65 percent expressing this fear compared to 57% of men. Women were also more likely to be concerned about health issues and potential medical expenses in retirement (6% versus 52% of men).

Ms Blakey acknowledged the immediate financial challenges faced by many Australians, but emphasised the long-term benefits of retirement planning.

“We recognise that many of our members are currently experiencing significant cost-of-living pressures,” she said. “While it can be daunting to think about long-term financial planning amidst these challenges, taking that first step can be incredibly powerful over time.”

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Over the past financial year, 68,000 HESTA members utilised the Fund’s online Future Planner tool, which aids in retirement planning. Ms Blakey says two-thirds of these users explored the impact of making additional contributions, adjusting their retirement date, or altering their investment strategies.

“Providing tailored support and guidance is crucial for enhancing our members’ financial literacy and confidence,” Ms Blakey added. “We’re seeing that in just 10 minutes, members can make meaningful progress towards securing their financial future.”

The research, conducted by PureProfile, was carried out between March 8-12, 2024, with a representative sample of 1000 Australians, reflecting the population by gender, age, state, and location.