AMP’s new Retirement Confidence Pulse report has revealed just 50 per cent of Australians are confident about retirement, as the costs continue to grow for retirees.
Based on a survey of 2,000 Australians, conducted by independent research company Dynata, just half of Australians express confidence in their retirement prospects, though age, gender, family status, and income proved key factors when it comes to confidence.
Namely, those aged between 40 and 49 (38 per cent) proved the least confident overall, though there was also considerable difference when factoring in gender, with 47 per cent of men in that bracket reporting retirement confidence compared to 32 per cent of women.
Digging deeper, just 21 per cent women in this age bracket who were separated or divorced reported confidence in their retirement, while single women with children came in at 19 per cent. Meanwhile, unemployed Australians aged 40–49 who were looking for work had the lowest level of confidence overall with just 13 per cent.
A primary drag for this age group, according to AMP, is their position as the ‘sandwich generation’, which sees them raising children and caring for ageing parents, while also often coinciding with peak mortgage debt.
At the top end of the spectrum, a higher income was strongly linked to higher confidence scores across all age groups. Namely, those aged 65 and over who earned an income of $190,000–$250,000 reported the highest confidence with 87 per cent, coming in more than 10 per cent higher than the overall average for this income group (75 per cent).
The trend is strongly reflected as income grows, regardless of age, as those earning less than $45,000 scored just 40 per cent, while those earning between $45,000 and $135,000 (51 per cent) and $135,000–$190,000 (66 per cent) reported more than 10 per cent compounding increases.
With 710,000 Australians set to retire in the next five years, according to AMP, on top of the 4.2 million already in retirement, Alexis George, AMP’s CEO, suggested that addressing this confidence issue needs to be a priority.
“Australians over the age of 65 will make up nearly a quarter of our population within four decades – a demographic shift set to reshape the nation’s economic and social landscape. Yet, as this Pulse shows, despite growing super balances and national wealth, too many feel financially insecure about life after work – an issue that needs to be front and centre for policymakers and the superannuation industry,” George said.
This follows an update from the Association of Superannuation Funds of Australia (ASFA) in which it revealed that the cost for a comfortable retirement had increased by some $13,000 over the last five years. Namely, it said that those aged around 65 now require $75,319 per couple per year to achieve a comfortable retirement, with $53,289 for singles.
