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Australians need to rely on property to afford retirement
Australians are expected to be saving for retirement for around 11 years longer than current retirees, with the majority of them planning to downsize from their current property in the future in order fund their retirement, according to HSBC.
The Future of Retirement report revealed that 41 per cent of the working age population had not received any financial advice to help them prepare for retirement.
What is more, the global research that compared the data from 17 countries, found that the average global retirement savings gap was seven years and that Australians had the third highest savings gap, with many people lacking adequate information on the real costs of retirement and relying solely on advice from friends or family.
The study also found that even though 75 per cent of working age people had started saving for retirement, over one third (35 per cent) of them had stopped or faced difficulties saving at some points.
Additionally, out of all the countries surveyed, Australians seemed to be the most likely to fund their retirement relying on their properties, with 26 per cent admitting they would fund their retirement through the proceeds from property with another 66 per cent of Australians saying they would consider downsizing from their current property in the future.
However, according to HSBC, the income from property coupled with savings and fund portfolios "may still not be enough" and because of that, 31 per cent of working age Australians expected to continue to work in their retirement years, compared to just 10 per cent of current retirees.
HSBC head of wealth, Scott Ellis, stressed that some people had already realised that saving may not be enough to adequately prepare for retirement and had decided to plan for alternate sources of income like property.
"Planning for retirement can appear daunting although not as potentially daunting as a retirement that has not been planned," he said.
"The best way to alleviate these concerns is to start early, seek professional advice and be prepared for the ups and downs of funding your retirement."
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