Many fresh retirees are not going to have enough to sustain them, recent research from Roy Morgan reveals.
According to the figures, nearly 500,000 Australians are intending to retire in the next 12 months, which is a six per cent increase on 2018 figures. The average savings is about $300,000, which is short of the estimated $545,000 that the Association of Superannuation Funds of Australia (ASFA) figures suggest they’ll need.
This shortfall means relying on the Age Pension, particularly in later years when the money has run out. This can lead to elderly living in poverty, particularly women, who tend to outlive men.
The average age of retirees has fallen from 62 years old just a year ago to 58 years currently. This reduces working life savings.
Key findings from the research include:
In the coming 12 months, 439,000 people intend to retire
This is almost evenly split between men (219,000) and women (220,000)
In 2018, 414,000 people intended to retire
In 2017, 395,000 people intended to retire
Savings of these intending retirees are below the recommended level to be self-funded
The average gross wealth of intending retirees is $299,000
In 2017, this figure was $293,000
Debt level is on average $27,000, reducing the net figure to $272,000
Source: Roy Morgan Single Source (Australia), 12 months to January 2017, n=421; 12 months to January 2019, n=430. Base: Australian 14+ intending to retire in the next 12 months. *Excludes owner occupied homes. Includes superannuation, property investments, other direct investments, deposits/transaction accounts, pensions and annuities and managed funds.
The Roy Morgan research was face-to-face interviews with over 50,000 consumers each year in their homes, including 430 who intended to retire in the coming year.