The gap between retirement dreams and savings reality
Retirement should be the happiest time of our lives, but recent research by a financial consultant firm has suggested that many Australians stand to be disappointed when they realise just what the pot of gold at the end of the rainbow actually looks like.
The Australian Retirement Vision Survey, a report commissioned by State Street and conducted by Rice Warner, has made some startling revelations about the perception many Australians have of life after retirement and the living standards they can expect.
Most notable of which perhaps is the finding that six out of 10 Australians believe they will be able to retain the same living standards in retirement. As State Street head of portfolio strategy Asia Pacific Jonathan Shead points out, the reality is significantly less.
Mr Shead told The Sydney Morning Herald, “Many people expected their post-retirement income to be as high as $982 a week, which is significantly higher than the $767 a week a week that the Association of Super Funds of Australia calculates as the standard required for a comfortable lifestyle and more than double the ASFA standard of $443 a week to fund a modest lifestyle.”
The report has also suggested these Australians are reluctant to seek advice.
Mr Shead added, “The industry's reputation has taken a battering in the press in recent times deterring some people from seeking out advice, but the evidence clearly shows that most people who have actually received advice find it very worthwhile.”
The report came from a survey of information involving over 1,200 super fund members and self-managed super fund investors across Australia.
It’s an interesting time for super in this country, but recent findings have also suggested that some Australians are starting to make the necessary adjustments.
In a recent blog post, Equip Super notes figures from the Australian Bureau of Statistics (ABS) which state that in 2013-14, 25 per cent of people aged over 65 were using their superannuation savings to draw an income in retirement, up from 20 per cent a decade earlier. Equip notes, “Of course, we would like to think this trend was solely a product of our great education and advice, but the reality is that superannuation balances have also grown over that period giving more Australians greater choice in how to make best use of their super benefit.”
What’s your take? Do you think Australians are being realistic about their retirement? Has enough information been made for retirees to adequately prepare?
Let us know in the comments.
Equip manages $7 billion of investments for members working across a wide range of Australian industry sectors. This superannuation fund has been providing strong investment performance and has been a reliable provider of retirement benefits for over 80 years.
Related links:
5 rules for a happy retirement
3 powerful forces impacting the Australian dollar