Habitual saving most effective for retirement readiness
Australia ranks seventh in the world for how well individuals are prepared for retirement, according to a new survey by Aegon released Wednesday.
The annual survey based on its Aegon Retirement Readiness Index (ARRI) found habitual saving was the most effective strategy to ensuring a healthy retirement fund.
The survey noted the expectation that retirement will last longer than childhood and said there needed to be changes in how individuals prepare and save for an extended retirement and highlighted the need for assistance from policymakers and employers.
"For most people, saving habitually is a realistic aspiration given that the average habitual saver earns approximately $41,000 per year," the report said.
"This falls to $29,000 in the emerging economies, broadly in line with the average earnings in most countries we surveyed."
The report said if habitual saving started at an early age it could boost an individual's retirement income by $11,000 if they decided to start saving from age 20.
The Government was noted as a vital player in providing retirement benefits along with encouraging more people to take responsibility for their own retirement security.
"Reforms to employer retirement plans and labour laws can also remove obstacles to people working longer," the report said.
"One-third of global respondents say that having access to more generous tax breaks on long-term savings and retirement products would encourage them to save more for retirement."
The survey measured attitudes and retirement aspirations among 16,000 respondents in 15 countries across Europe, the Americas, Asia, and Australia.
Recommended for you
Retail investment into private credit funds could surpass that of sophisticated investors, according to ASIC, but the regulator admits it is unsure how and where these individuals are first being introduced to the vehicles.
With the high cost of advice keeping young Australians locked out of advice, a fintech provider has said digital advice is key for licensees to capture this unadvised demographic.
ASIC chair Joe Longo has announced he will step down at the end of his term, departing the corporate regulator in May 2026.
When it comes to the phase-out of AT1 bonds, Schroders fixed income manager Helen Mason has urged financial advisers to sell up sooner rather than later or risk capital losses.
