Research by RaboDirect has found that Australians have very different expectations about their retirement, depending on their life phase.
Most (55%) of Gen Y believe they will have enough superannuation for a comfortable or modest retirement, according to the 2017 RaboDirect Financial Health Barometer. But only 31% of Gen X believe and 30% of Baby Boomers believe the same,
Likewise Gen Y expect to retire earlier, at age 60, compared to age 65 for both Gen X and the Baby Boomers. Though the survey also found that the overall expected retirement age has been steadily decreasing since 2014.
“This expectation to retire younger every year is at odds with the expectation of having less money at retirement, and tends to reflect that average Aussie workers are not proactively engaged with their super funds, nor do they have a concrete strategy for a comfortable retirement. The results highlight a critical need for Aussies to take stock of their super and savings to plan for the future,” said Bede Cronin, Head of RaboDirect.
The survey found that men expect to have $475,646 in superannuation at retirement, compared to $270,913 for women. Broken down by generation, Gen Y expect to have $421,683 in super at retirement, Gen X expect $392,554 and Boomers expect $295,824.
Mr Cronin implies that the confidence by Gen Y in their retirement may be due to their “great habits”, which prepare them well for retirement – including being more likely to see a financial planner and contributing more to super.
“On the other hand, Baby Boomers are a product of the economic conditions they’ve experienced and this has perhaps decreased their ability to contribute to their superannuation, where Generations Y and Z have more time to catch up,” he said.
The survey found that Boomers are twice as likely, compared to Gen X and Y, to expect to retire with a mortgage. 55% of Boomers believe that they will run out of money in retirement.
The 2017 RaboDirect Financial Health Barometer is based on a survey of 2,300 Australians between the ages of 18 and 65.