Older working Australians are expected to have a shortfall of funds in retirement, with almost a third of those aged over 50 having a balance of less than $100,000, says REST Industry Super.
According to new research report – The Journey Begins – commissioned by REST Industry Super, only 55 per cent of older Australians expect to be able to afford a ‘modest’ retirement.
REST Industry chief executive Damian Hill said: “Part of the reason for this shortfall is that older working Australians – the baby boomer generation – have only been accumulating meaningful superannuation since the compulsory guarantee levy was introduced in 1992, so don’t have the benefit of decades of savings to retire on.”
According to the report, 60 per cent of older working Australians said a modest retirement will not be enough to fund their retirement plans. Only 39 per cent of those surveyed expect to be able to fund a comfortable retirement.
The report also found that 72 per cent of older working Australians with adult children are planning to help them financially by drawing on their superannuation balances in retirement.
“What comes through clearly is the desire of people approaching retirement to ease the financial burdens their adult children face today,” Mr Hill said.
“That’s laudable but we would urge retirees not to forget that their retirement savings are first and foremost meant to fund their own retirement, and using retirement savings for other purposes may mean they become a financial burden on their own children later in life.”
The report found that older workers also have reservations about the use of self-managed super funds (SMSFs) as a savings model.
"The cost to maintain an SMSF, both financially and in terms of time, is significant and usually more than what people think,” said Mr Hills.
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