Super savings dry up five years too early for most
Uncontrollable factors are derailing the best laid retirement plans of many Australians, with the average retiree outliving their superannuation savings by five years, new research reveals.
Data from Mercer’s ‘Expectations versus reality of retirement’ survey showed that 40 per cent of Australians were forced into earlier retirement before they were financially ready, due to redundancy or for health reasons.
While half the population underestimated their life expectancy by more than two year, with one in four white collar workers living four years longer than average, the research found.
Although the survey found that a large proportion of pre-retirees and retirees were concerned about the longevity of their savings, Mercer’s managing director and Pacific market leader, David Anderson, said few had a formal plan to address this issue, with just one in three engaging a financial planner.
“Despite most of us believing we’ll work and save for our retirement well into our 60s, the reality is that uncontrollable triggers can derail the best laid plans for retirement,” he said.
“People understand we’re living longer, which means we need more money to last the distance, but expectations are disconnected to the reality of how to manage savings through retirement to ensure there’s enough to the very end, particularly if retirement happens earlier than expected.”
The survey also found that one in 17 retirees concerned about longevity risk have returned to work in a bid to combat longevity risk, with 20 per cent of pre-retirees aged 50 to 80 years, planning to return to work to insulate their savings.
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