Pandemic stalls retirement for millions of Aussies

·2-min read
Retirees in deck chains
1 in 4 Aussies have changed their retirement plans due to the pandemic. (Source: Getty)

COVID has pushed back retirement for millions of Aussies, with some expecting the pandemic to add as many as five years to their working life.

A survey of 2,000 people by superannuation fund Equip found one in four Australians had had their retirement plans thrown off course by the pandemic.

More than 11 per cent had put their retirement plans on hold.

Older Aussies were the most pessimistic about their retirement plans, with 15 per cent of those aged 55 and over expecting to push their retirement back.

Half of these people expected to be working for another four or five years before they could retire.

“Purse strings have been tightened due to the rising cost of living and the fallout from COVID,” Scott Cameron, CEO of Equip, said.

“It’s not surprising that this pressure is causing some retirement plans to be revised.”

The survey revealed 25 per cent of people had less disposable income than they did in 2022. That leapt up to 33 per cent for people aged over 55.

However, the pandemic had brought retirement forward for some Aussies, with about 15 per cent intending to retire earlier.

People overestimating how much they need

The good news is many people overestimate how much they need in superannuation to retire stress-free.

A ‘comfortable’ retirement is defined by the Association of Superannuation Funds of Australia's Retirement Standard as $545,000 in retirement savings for a single person and $640,000 for couples.

However, as many as 36 per cent of surveyed individuals thought they needed to have an individual minimum of $750,000 to retire comfortably.

“Many Australians are grossly misjudging how much they need in their reserve to retire, which is likely causing additional – and perhaps unnecessary - stress,” Cameron said.

He said planning for retirement was key.

“A financial planner can help you make sure your super is on track to deliver the best retirement possible for you and your family.

“Small steps now, such as making voluntary contributions into your super if you have disposable income, can have a huge pay off down the line,” Cameron said.

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