iAdvice Financial Services | Superannuation shortage facing Aussie retirees
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Superannuation shortage facing Aussie retirees

Superannuation shortage facing Aussie retirees

Latest research from the mutual shows Australians hoping to live the retirement lifestyle they aspire to will, from age 65, run out of retirement savings after five years.

AMP added that with the average life expectancy of Australians now 82.5 years, those who use all of their super savings within the first five years of retirement will experience a super shortage of 12.5 years.

The research also found women who retired at 65 would have a super shortage of 14 years, two extra than men, who will run out super savings with 12 years remaining against their life expectancy. AMP said women understood their predicament acutely, with 71% of women worried about having enough money to retire, compared to 50% of men.

AMP financial adviser Dianne Charman said the findings revealed a gap between the expectations and realities of retirement.

“Most of us want to retire early and we want to be comfortable. However, with life expectancy continuing to rise, we are potentially leaving ourselves short of cash in our retirement years. The research suggests many Australians are facing the prospect of having to push out their retirement plans by at least 10 years,” Charman said.

“The reality is that today we need to make our earnings from 40 to 50 years in the workforce, extend across 80 to 90 years of living.”

Charman added that the greater life expectancy of women and the time they typically spent out of the workforce contributed to the disparity.

The research also found a difference exists in the super shortage of single Australians and couples – with singles three years better off than their coupled-up counterparts, who face a super shortage of 14 years.

According to Charman, early planning was the key to ensuring more Australians retired with enough superannuation savings to live comfortably.

“It’s important to think about your retirement goals and whether your super contributions will fund the retirement you want early on in life. Planning early will go a long way towards bridging the super shortage between the retirement we want and the one facing us,” she said.

According to AMP, retirement anxiety was perhaps the reason Generation Y (25 to 34 year olds) was likely to have the lowest superannuation shortage (12.1 years) if they retired at 65 years old – with the mutual highlighting 81% of Generation Y respondents worried about having enough money to retire comfortably.


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