Working Aussies lacking retirement plan: Vanguard
Vanguard’s latest report has found that while Australians’ retirement income expectation shot up some 59 per cent in the last two years, almost half of the working population have no plan on how to prepare for retirement.
In its third annual How Australia Retires report, a survey of 1,800 Australians aged 18 and over found Australians under 45 expect to need $100,000 to retire comfortably, up 12 per cent from $89,000 in 2023.
For those aged 25–34, there is an even greater jump with that demographic expecting to need $106,000 which has risen 59 per cent since 2023, when they said they would need $66,000.
On the contrary, couples who are already retired said they spend around half of that at $55,000 annually.
But even as their income expectations grow, around half (48 per cent) of working Australians report having no plan for how they will prepare for retirement, as well as gaps in their financial literacy, especially around the “preservation age” they can access their superannuation.
For those who are taking a more proactive approach to retirement, Vanguard found that retirees with a solid retirement plan are 65 per cent more likely to have a positive outlook on retirement and three times more likely to feel highly confident in their ability to support their desired lifestyle.
The effect is even greater among those who seek financial advice, with 40 per cent stating they are very or extremely confident about their ability to fund their desired retirement, almost twice (22 per cent) that of those who have never engaged a financial adviser.
Having an ongoing relationship with a financial adviser is associated with lower negative sentiment towards retirement.
Speaking on the findings, Vanguard Australia managing director Daniel Shrimski said that while younger Australians tend to be more pessimistic about their retirement outlook, starting to look at this early and taking a proactive approach to retirement planning can boost their confidence.
“While a solid retirement plan will mean different things to different people, the findings told us that those with more confidence were likely to have done things like make extra super contributions or obtained financial advice,” Shrimski said.
“Having a plan can help Australians avoid the fear of running out which is one of the biggest sources of anxiety in retirement. It’s not just about having enough money, but also about having the confidence that your lifestyle is sustainable.”
Looking at how Australians can boost their retirement confidence, Vanguard suggested five key actions:
- Having a solid retirement plan.
- Boosting financial literacy.
- Being familiar with the retirement system.
- Making voluntary super contributions.
- Engaging with your super provider at least twice per year.
AUTHOR
Shy-Ann Arkinstall
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