Australians ignorant of market impact on super

Insufficient planning may mean working longer

By Alice Uribe
Fri 18 Jul 2008

Australians have little understanding of the impact the global share market decline may have on their superannuation, a new survey has found.

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Australians do not understand the impact on their superannuation returns and retirement savings of the global share market declines, according to a new survey.

The Mercer Super Sentiment Index revealed a large number of Australians were not worried, or only a little worried about the impact of share market performance on their super savings.

Of the 1000 people surveyed, 72 per cent believed their superannuation balance would be higher on their next statement.

"Many Australians have not connected the dots between share market performance and their superannuation savings and most have not done sufficient planning for retirement," Mercer's outsourcing business Asia Pacific leader David Anderson said.

In fact, nearly half of the people surveyed had made little or no preparation for retirement.

"This will be costly leading up to and during retirement, potentially forcing them to work for much longer than they had planned or forcing them back to work in later years," Anderson said.

This was especially true for younger Australians. The survey found that over 70 per cent of people aged 20-34 years have given little or no thought to retirement.

"Saving for retirement is about sustained commitment - not knee jerk reactions to market volatility. But people should be made aware the current Superannuation Guarantee contribution will not be enough for many Australians to retire in comfort, let alone be self-reliant," Anderson said.

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