POWERED BY MOMENTUM MEDIA
Grim outlook for Australian retirement adequacy
A significant number of Australians are unlikely to achieve adequate retirement incomes after all sources of savings are considered, according to research by Towers Watson and The University of Melbourne.
The data reveals only 53 per cent of couples and 22 per cent of singles are set to have a comfortable level of retirement income even when compulsory superannuation, voluntary superannuation, the age pension and other retirement savings not held in superannuation are taken into account.
The research is a sample of Australians aged 40 to 64 targeted by the Household, Income and Labour Dynamics in Australia (HILDA) survey. The analysis determined a fixed dollar amount as a target retirement income, based on the ASFA Retirement Standard 'Comfortable’ level - which is currently $57,655 for couples and $42,158 for singles.
Australians in this age group will be heavily reliant on retirement savings outside superannuation and the age pension, the research states.
If non-super retirement savings are excluded, the levels drop to just 32 per cent of couples and 11 per cent of singles on track to achieve a comfortable level of retirement income.
Furthermore, if the age pension is also excluded, only 15 per cent of couples and 5 per cent of singles are expected to meet the ASFA Retirement Standard.
Towers Watson senior consultant John Burnett advocates providing all superannuation fund members with a retirement projection every year. He believes this is a significant step in educating members about the retirement income shortfall they may be facing, as online calculators and financial planners are unlikely to solve this gap alone.
“The research highlights how important it is for superannuation fund members to be aware of their projected retirement income, but this information is currently not being provided regularly by most funds. While super savings are only part of the equation, this is the logical starting point. Members then need to take retirement income from other sources into account,” Burnett said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
The superannuation industry will be judged by its member services rather than how effectively it accumulates wealth, according to Stephen Jones.
The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members.
Super Review announced 21 winners at the annual Super Fund of the Year Awards, including the recipient of the prestigious Fund of the Year Award.
A research firm has given UniSuper a glowing review, praising its strong leadership and “compact team”, as well as its “creditable governance” structure.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.57 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
32.09 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
27.42 3 y p.a(%)
