Recent research indicates that over four million Australians are anxious about their ability to afford retirement. Finder’s study revealed that 20% of Australians are concerned they won’t accumulate sufficient superannuation or other investments to retire comfortably. Many anticipate needing to reduce their spending to cope with this worry.
The Association of Superannuation Funds of Australia suggests that individuals should ideally have $595,000 saved, while couples should aim for $690,000 to enjoy a comfortable retirement. However, current figures from the Australian Taxation Office highlight that the average super balance is approximately $172,000, with median amounts significantly lower at $66,000 for men and $52,000 for women. This raises concerns that a secure retirement may be unattainable for a large segment of the population.
Pascale Heylar-Moray from Finder warns that inadequate super savings could lead to financial difficulties in later life. She emphasises that many Australians fear early retirement without adequate funds, leaving them vulnerable as they age. The reliance on the Age Pension is also questionable, as access can be restricted based on asset levels.
About 27% of Australians remain uncertain whether their superannuation will suffice for retirement, with 10% believing they will need additional investments to meet their financial needs. In response, many are exploring alternative strategies to ease potential financial burdens in retirement.
One approach includes salary sacrificing, which allows employees to direct a portion of their salary into their super. This strategy can enhance retirement savings while benefiting from a lower tax rate of 15% on earnings below $30,000. It’s also crucial for Australians to monitor the performance of their super funds, ensuring they are not enrolled in underperforming options and that their employer is consistently meeting superannuation contribution requirements.
In summary, as retirement anxiety grows among Australians due to inadequate savings, proactive measures such as salary sacrificing and vigilant monitoring of investments are recommended to secure a more financially stable future.