The second Citibank Retirement Index report reveals that 19 per cent of Australia’s semi and fully retired population aged over 55 have failed to save for their retirement — a total of 676,000 individuals.
This figure increases to 21 per cent of retirees aged 65 and older, although it drops to 16 per cent of 55 to 64-year-olds, according to the index report, which is published every six months.
It also reveals that more retirees have made spending cuts in the six months since the first Citibank index report last year, up from 68 per cent in May 2005 to 75 per cent in November 2005.
The previous index found 48 per cent of Australia’s 3.6 million semi or fully retired over 55s are relying on the government pension for their main source of income.
It also found that 39 per cent of this population segment did not have a secondary/alternative source of income, and that the average before-tax income for this segment of the population is just $22,000 per annum.
Citibank head of investments Andrew de Vries said this “less than rosy scenario could have looked a lot different if people had started saving earlier for retirement”.
“Only one in four of today’s over 65s showed any savings initiative before they turned 40, although those aged 55-64 were more proactive, with 36 per cent on the retirement saving bandwagon before the age of 40.
“This take-up is well below par and as an industry we need to address it,” he said.
The latest Citibank index also suggests that Australia’s retirees are “at least seeing the error of their ways” De Vries said, with their failure to start saving earlier for retirement being their “number one regret” in retirement.
“Fully 40 per cent of over 65s wish they’d started [saving] earlier, while 55-64 year olds are even more remorseful, with 49 per cent telling us the same thing.”
When asked how much sooner they wished they’d started saving for retirement, De Vries said 48 per cent of respondents said more than 20 years earlier and 20 per cent said 16 to 20 years earlier.
