A joint report by National Seniors Australia and Challenger entitled How realistic are Australians’ retirement plans? surveyed more than 2,000 seniors.
The report found 53 per cent of pre-retirees will have less than $400,000 at the start of retirement – considerably less than the $544,000 that ASIC estimates the average person will need.
Figures released by the Association of Superannuation Funds of Australia in May found that over the year to the March quarter, the cost of retirement increased by 2.7 percent.
Challenger chairman, retirement income, Jeremy Copper indicated that seniors are not considering the broader “implications” of funding aged care.
“This outcome is driven by the fact that the Australian superannuation system isn’t mature and many retirees have not participated in super for the whole of their working lives,” said Mr Cooper.
“Retirees are handed a lump sum and told to make it last as long as they do – but there’s very little education and few incentives to do so.
“This survey shows that the world-class super system of which we boast is only half-baked when it comes to retirement,” he added.
The report outlined that it is essential people plan more effectively for their retirement by understanding the question of potential life expectancy, knowing the implications of funding aged care, and ensuring that they maintain a budget.
“There is considerable scope for improved education for seniors around these key issues,” said Mr Cooper.
