The number of people intending to retire in the next year has increased by 6 per cent from the year before, although their average net wealth levels are well below the recommended amount to be self-funded, a Roy Morgan study has found.
The number of intending retirees is now at 439,000, up from 414,000 last year and 11 per cent above 395,000 in 2017.
Currently, the average gross wealth (total assets excluding owner-occupied homes) of intending retirees is $299,000, up 2 per cent over the last two years.
The average debt level for the cohort comes to $27,000, up 23 per cent, and reducing their average net wealth to $272,000. This is generally considered to be inadequate for self-funded retirement, Roy Morgan said.
The Association of Superannuation Funds of Australia (ASFA) estimated that an individual would need $545,000 and a couple $640,000 for a ‘comfortable retirement’.
Roy Morgan industry communications director Norman Morris 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,” Mr Morris said.
“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 added that additional pressures on retirement decisions include 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.”
Men currently represent 219,000 intending retirees, against 220,000 women.
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