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Australians Are Not Saving Enough for Retirement

February 27, 2017 Lifestyle No Comments Email Email

Having enough money for retirement is a huge concern for many around the world, including many Australians. People often find themselves working long after they had hoped to retire because they can’t afford to stop. 

Although most people have some kind of retirement funds, whether it’s their government pension, a private pension or some other investment, for the majority in Australia, it’s not enough. According to the Commbank Ready Retire Index, one 20% of men and 15% of women aged 55-59 have enough to live comfortably during their retirement. So why aren’t people saving enough and what can they do to make things different?

Couples tend to be better prepared for retirement than single people, with much higher rates of preparedness for a comfortable retirement. There are a few reasons for this that it’s important for couples to take into account when they’re considering their retirement funds. Living as a couple is cheaper than living as a single person, as there are many costs you can share. Couples also tend to have more savings put together than a single person has on their own. Another contributing factor is that in a couple, a man can help to bolster a woman’s savings. Women often have smaller funds for retirement as they have spent more time out of work caring for children or elderly relatives.

Investment Zen

According to the Association of Superannuation Funds of Australia, a comfortable retirement pot is almost $60,000 a year for a couple and around $43,000 a year for a single person. Of course, these calculations are based on certain assumptions. For example, that the person owns their home and is healthy. Another thing to keep in mind is that people have different ideas of comfortable. For the ASFA, “comfortable” includes being able to take holidays abroad. But for many others, comfortable would simply mean being able to get by without having to worry too much about money.

Even though there are many people who aren’t on the right track to save enough for retirement, it’s not too late for many. There are ways to ensure you can save more now so that you can be more comfortable in retirement. Financial planning is essential for anyone who wants to be prepared for retirement. According to Baggetta.com.au, there are three important questions anyone needs to ask. Firstly, how much do you need for retirement? Secondly, what should you do with your superannuation? And finally, should you downsize the family home? Of course, there are many more questions it’s worth asking to make sure you’re fully prepared.

As a first step, it’s essential for anyone planning their retirement to get familiar with their finances. They need to take a look at what they are doing with their money now and how they can maximise their funds to support them in retirement. Creating a budget is one of the fundamental tasks to complete to get a clearer picture of where you stand financially.

Many people may not be saving enough for retirement, but they can still improve their situation. Seeing a financial advisor can help, but it’s also possible to start addressing things alone.

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