Baby boomers to be hit by savings ‘time bomb’
Perpetual Funds Management has warned of a savings gap "time bomb" between the income Australians want in retirement and the lump sum they expect will provide it.
Perpetual's annual Investment Pulse survey found the average working Australian needed to contribute three times more to superannuation than at present to deliver their expected retirement income. The average expected pay-out is $187,000 while the average annual retirement income expectation is $37,600.
"The maths just don't add up - you can't get $37,600 a year out of a lump of $187,000 when you retire," says Perpetual retail boss Gerard Doherty.
"For someone who's looking for a $36,700 income, you are looking at (a lump sum of) around half a million. It is, I guess, a time bomb that's just ticking away slowly."
Doherty says the worst affected are likely to be "baby boomers" who have missed out on the benefits of government-mandated superannuation and will be squeezed by a declining tax base as Australia's population ages.
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