According to recent data, employees often anticipate they will be $200,000 short when it comes to superannuation, which has led to an increase in anxiety among Australians about not having enough to retire on.
According to AMP’s Financial Wellness survey, compared to 56% of men, 70% of women were concerned about not having enough money saved for retirement.
Rising cost of living and inflation are escalating retirement concerns, raising worries that Australians are “unnecessarily reducing quality of life” as they age.
Australians usually felt they required $600,000 to retire on, but only anticipated to have $400,000 saved up, according to a “fear of running out” phenomena found by AMP.
According to major industry advice, the most recent financial data also reveals that the $200,000 deficit is rather near to reality.
People between the ages of 65 and 69 had an average superannuation balance of $383,367, according to the most recent Australian Taxation Office statistics.
Based on the required superannuation balance, it equates to a shortfall of $151,633 on average for Australians who are at or nearing retirement age.
Manager of retirement solutions at AMP According to Ben Hillier, Australians are reducing their spending because they are so concerned about not having enough money for retirement.
According to him, “millions of Australians are needlessly reducing quality of life in later years.”
Mr. Hillier referenced data from the federal Treasury’s 2020 Retirement Income Review, which revealed that seniors were passing away with up to 90% of their superannuation intact.
The Barefoot Investor, a best-selling book, has criticized the retirement goals set by the superannuation sector.
‘The super business has played to the rich in the members’ stand for far too long,’ Pape said to his supporters last month.
Instead, Pape has accepted a suggestion made by Super Consumers Australia, which feels that $258,000 is enough for someone who has paid off their mortgage.
According to tax office statistics, all adult age groups had average superannuation balances of $145,388.
The average balance for individuals aged 55 to 59 was $246,771, compared to $108,217 for those in the 40 to 44 age group and $323,871 for those in the 60 to 64 age group.
2,000 respondents were polled by AMP in mid- to late-June.
The data was gathered prior to the Australian Bureau of Statistics reporting that headline inflation had increased by 6.1% in the year to June, above the Reserve Bank’s target range of 2 to 3%.
Inflation is anticipated to reach a 32-year high of 7.75 percent in 2022, according to the RBA.
According to the AMP research, women between the ages of 50 and 59 were most concerned about rising living expenses.
Recent economic trends, such as growing living expenses, inflation, and choppy stock markets, are now dictating how individuals think about retirement, the report said.
Additionally, women often have lower super than males, which causes them to worry more.
According to the AMP survey, single parents and those in the hospitality, healthcare, and social assistance industries are among those who are most concerned about retirement.
This is due to a number of circumstances, such as lower super balances, longer life expectancies, and a higher possibility that they would be responsible for managing the care of elderly relatives.
Women had an average balance of $129,506 compared to men’s $161,834 across all age categories.