Fewer working Australians than last year believe their savings will be sufficient to fund their retirement, according to a new survey.
But curiously, according to the latest AXA Retirement Scope survey, which was conducted among 7,500 people from 12 countries, 50 per cent of Australians were still confident about maintaining their standard of living in retirement, even though they had no idea of the income level required to do so.
“One thing that did emerge from this year’s over last year’s survey is the number of people who think their retirement income will be sufficient among the working population is down 13 per cent. So one of the big trends we picked up is more people do not believe that their income will be sufficient,” AXA general manager of sales and marketing Adrian Emery said.
And for retirees the situation seems to be materialising as the latest Citibank Retirement Index shows most of them are only living on $22,000 per year, compared to the average working wage of $53,000 per annum.
Furthermore, the Citibank research revealed almost one million people have returned to the workforce since retiring.
Citibank’s Retirement Index illustrates the principle that early saving is better, with those who began their retirement savings before the age of 40 having an income of $28,428 per annum, while those who only started saving after the age of 50 had an income of $21,648 a year.
Emery said AXA’s research showed earlier preparation for retirement was evident, but feels it is never too late for the individual to begin the planning process.
“It’s never too early to start planning for your retirement, but is it ever too late? There’s so much financial planners can still do for people as they approach retirement in terms of not just looking at their superannuation but looking at their tax position and how they structure their incomes. It’s always worth trying to seek advice on what your position could be,” he said.
While the Citibank study showed 48 per cent of retirees currently plan to rely on the government pension as their main source of retirement income, the AXA study revealed this attitude may change in the future as more Australians feel the individual should be responsible for his or her own retirement income.
“What the survey does show us is Australians do realise their retirement is their responsibility and if people understand this clearly they will have to adjust their affairs accordingly. If that means working a little later or changing your working patterns as you approach what you want to be your retirement age, I think most Australians would embrace that,” Emery said.
