The retirement savings gap narrows
Australians are still largely unprepared for retirement, according to groundbreaking new research released by AMP today.
The AMP Superannuation Adequacy Index, launched this morning, was compiled by Canberra-based economic consultancy Access Economics and found that while Australians are better prepared for retirement than previously thought, current savings are falling short of the expectations of millions of workers.
It said the good news is that around two-thirds of the workforce (seven million Australians) is on track for an adequate retirement thanks to the large capital gains of recent years and a recent surge in voluntary superannuation contributions.
However, the research said the bad news is that 3.5 million Australians will need to improve their savings performance over time if they hope to maintain the targeted standard of living in their retirement.
The research found that more than 1.9 million Australians under the age of 40 are already falling behind when it comes to retirement savings and that even if they contribute more to superannuation later in life, some 35 per cent will not meet the target for a comfortable retirement.
It said that among those falling behind, average retirement incomes were expected to fall short of the target by 13.5 per cent or $97 a week in today’s terms.
Among the other findings of the research was that Australians are contributing on average 12.6 per cent of their salaries to superannuation, rather than the compulsory 9 per cent minimum, voluntary contributions rise significantly with age group and those aged 60 to 65 are contributing more than a quarter of their income to superannuation at an average of around 25.5 per cent.
AUTHOR
Mike Taylor
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