The number of Australians planning to retire in the next 12 months has risen, with many set to rely on government benefits, according to research.
Roy Morgan estimates 439,000 workers intend to be retired in 12 months – 6% more than 2018’s figure of 414,000 and 11% above 2017’s 395,000.
Yet the average gross wealth (total assets excluding owner-occupied homes) of the intending retirees surveyed by Roy Morgan was $299,000 – only 2% higher than the retiring class of 2017’s average of $293,000.
And it gets worse if you include debt – the average net wealth (gross wealth minus debt) for intending retirees in 2019 is $272,000.
That wealth includes superannuation, property investments, other direct investments, bank account balances, pensions, annuities and managed funds.
The average debt among these workers was $27,000 and Roy Morgan estimates that slightly more women (220,000) intend to retire in the next 12 months than men (219,000).
Given that the Association of Superannuation Funds of Australia (ASFA) estimates the cost of a ‘comfortable’ self-funded retirement to be $545,000 for singles and $640,000 for couples, Roy Morgan says these figures demonstrate that “retirees will be relying on government benefits for some time yet”.
Roy Morgan’s Industry Communications Director Norman Morris said funding the retirement of Australia’s ageing population is a major problem facing the government.
“Superannuation, through its tax concessions and compulsory nature, has been the main vehicle for trying to achieve this and is having some success but total savings (including super) are still falling well short of funding those currently intending to retire,” Mr Morris said.
Despite the modest rise in their average gross wealth, retirees are intending to retire sooner, with the average age of intending retirees falling to 58 years from 62 years in 2018.
Mr Morris said this is a contributing factor to the shortfall in retirement savings.
“This obviously has the potential to reduce savings due to a shorter working life,” he said.
“Additional pressures on retirement decisions are the declining real estate market, share market volatility and superannuation conditions if there is a change of government.
“These factors have the potential to delay retirement decisions and encourage people to keep their jobs longer, particularly if the government tightens up the qualifications for the aged pension or other retirement benefits.”
Roy Morgan’s findings are based on their survey of 50,000 consumers, which included 430 respondents who said they intend to retire in the next 12 months.
- Frugal Aussies spending less money on things that spark joy: CommSec
- Majority of Australians do not have a will in place
- Afterpay hits record sales over Black Friday and Cyber Monday
- Aussie shoppers spent up big in Black Friday sales, CBA data confirms
- Citi raises home loan interest rates, NAB lowers