Most working Australians don’t believe they will have enough superannuation to retire comfortably.
Despite the superannuation system being in place for more than three decades, a recent YouGov survey commissioned by financial advisory firm Findex found two out of three Australians fear they won’t have the financial resources to ever retire.
And rather than younger generations fretting about their future, it seems to be older Australians who are worried the most.
In the survey of 1000 people planning for retirement, a majority (52 per cent) of baby boomers said they were not confident of having enough money to retire on, compared with 38 per cent of gen X and 31 per cent of millennials.
The question ‘how much do I need to retire?’ is a vexed one, with the answer differing greatly depending on who you ask.
According to the Association of Superannuation Funds of Australia (ASFA) Retirement Standard, a retiree needs more than $500,000 in their superannuation account to live comfortably.
But many think this number is far too high, and may be contributing to people’s feelings of inadequacy when it comes to their retirement savings. For Australians in their early 60s, the average super balance is $356,000 for men and $288,000 for women – well below the ASFA’s standard.
Contrast this with the estimate from Super Consumers Australia (SCA) that for a ‘medium’ standard retirement, an individual needs only to have around $300,000 by their early 60s.
It’s worth noting that the ASFA is an association for superannuation funds, whereas SCA is an advocacy group for superannuation customers, which may explain the discrepancy between the two estimates.
YourLifeChoices’ research shows that 25 per cent of single respondents in the most recent Older Australian Insights survey feel they need between $250,000 and $500,000 for a comfortable retirement. More than 16 per cent feel they need between $500,001 and $1 million, and more than 21.5 per cent believe they’d need more than $1 million.
As couples, around 18% believe they’d need between $500,000 and $750,000, just under 20 per cent believe they’d need between $750,001 and $1 million, while almost 45 per cent think they’d need more than $1 million for a comfortable retirement.
With that figure in mind, 52 per cent said they do not have the amount required for a comfortable retirement and, when asked if they’d have enough to provide an income for life in retirement, almost 57 per cent said “no”.
The YouGov research highlighted Australians’ lack of confidence in their financial abilities. Australian women were more likely to report their financial literacy as ‘poor’ (27 per cent) compared to men (15 per cent).
Despite this fear of never retiring, most Aussies (70 per cent) have not sought out any professional financial advice, despite more than 80 per cent believing such advice could help them.
Again women (24 per cent) were less likely than men (3 per cent) to have received professional advice.
Interestingly, the closer respondents were to retirement age, the less likely they were to consider getting professional advice, with 49 per cent of baby boomers saying they were unlikely to seek financial advice, compared with 34 per cent of gen X and 22 per cent of millennials.
Reasons people gave for not seeking advice were the cost (34 per cent), not feeling they earn enough to make it worthwhile (32 per cent), while 19 per cent said procrastination.
Do you feel you have enough to retire? Have you ever received financial advice? Let us know in the comments section below.
Also read: Does size matter when it comes to your super fund?
