Almost 440,000 people are expected to retire in the next 12 months, an increase compared to recent years. But there are questions over if they have enough saved to provide for their retirement.
The latest figures from Roy Morgan has 439,000 people expecting to retire in the next 12 months, which is up from 414,000 in 2018 and 395,000 in 2017.
However their level of savings may not be sufficient. The average net wealth of those intending to retire is $272,000. Roy Morgan says that this amount is “generally considered to be inadequate for self-funded retirement”, pointing to the ASFA Retirement Standard of $640,000 for a ‘comfortable retirement’ for a couple.
“The overall conclusion from this is that currently, intending retirees will be relying on government benefits for some time yet.”
Norman Morris, Industry Communications Director with Roy Morgan, said: “A major problem facing the Australian government and individuals is how to fund the retirement of an ageing population. Superannuation, through its tax concessions and compulsory nature, has been the main vehicle for trying to achieve this and is having some success but total savings (including super) are still falling well short of funding those currently intending to retire.”
“A contributing factor to savings falling short of desirable levels has been a reduction in the average age of intending retirees, which has fallen from 62 years 12 months ago to 58 years currently. This obviously has the potential to reduce savings due to a shorter working life,” he said.
“Additional pressures on retirement decisions are the declining real estate market, share market volatility and superannuation conditions if there is a change of government. These factors have the potential to delay retirement decisions and encourage people to keep their jobs longer, particularly if the government tightens up the qualifications for the aged pension or other retirement benefits.”
The retirement and wealth figures come from Roy Morgan’s Single Source survey, which is based on 50,000 face-to-face interviews. 430 of those interviews were with people intending to retire in the next 12 months.