There’ll be nearly half a million Australians wanting to retire in the next 12 months – but they’re not prepared.
According to Roy Morgan, the level of retirees wanting to retire in the next year has risen by 30 per cent in the last ten years to 426,000.
There’s some good news – average gross wealth and average net worth has risen too, with the latter jumping 37 per cent from $222,000 to $350,000.
But the Association of Superannuation Funds of Australia estimates that a single retiree would need $545,000 to retire comfortably, whereas couples will need $640,000.
This amount is set to rise which will delay retirement decisions, leaving the Australian government with the challenge of funding the retirement of an ageing population, Roy Morgan said.
“Superannuation, through its tax concessions and compulsory nature, has been the main vehicle for trying to achieve this and is having some success but is still falling well short of funding the retirement of those currently intending to retire.”
With stock markets not looking likely to pick up any time soon, this shortfall looks likely to continue in the short term as superannuation fund growth will be restrained.
“The average level of savings and superannuation for those intending to retire in the next 12 months is well below what is required to be able to lead what ASFA describes as a comfortable lifestyle,” said Roy Morgan industry communications director Norman Morris.
“This will put more pressure on government funding for some time yet unless there are changes to eligibility rules, taxation or superannuation regulations.”
Homeowners aren’t safe, either. Houses are generally considered a safe potential source of retirement income, but declines in major housing markets across Australia, homeowners will be feeling the pinch.
Renters, who don’t have such an asset to fall back on, are in an even shakier position.
“Those intending retirees who rent are at a disadvantage and are growing in number, as shown by the fact that a decade ago 81 per cent of intending retirees were home owners,” said Roy Morgan.
“It is likely that as home values are currently declining that even home owners will feel less confident about their retirement funding.”
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