February 15, 2018
Nearly one in five Australians do not think they can retire without government support, new data shows.
According to Mortgage Choice’s Australian Financial Savviness Whitepaper, 19.4% of Australians believe they won’t be able to retire at 65 years of age without relying on government assistance.
“I am not surprised to hear that almost 20% of Australians won’t be able to exclusively fund their retirement themselves,” Mortgage Choice chief executive officer John Flavell said.
“The fact is, the cost of living continues to rise, which is stopping many Australians from effectively saving enough money to fund a comfortable retirement.
“Every day expenses including gas, electricity, childcare, telecommunications and transportation continue to climb higher year after year. And, to make matters worse, wage growth is stagnating. As such, Australians are being forced do even more with the same amount of money.”
According to the latest data from the Australian Bureau of Statistics, Australian wages grew just 2% between the September 2016 quarter and the September 2017 quarter.
“Interestingly, despite the fact that wage growth is stagnate and the cost of living continues to rise, those most optimistic about their retirement savings strategy were those under the age of 30,” Mr Flavell said.
According to the Whitepaper, 44.8% of those under the age of 30 said they were confident that they would live either a ‘lavish’ or ‘comfortable’ lifestyle in retirement.
Meanwhile, just 26% of those aged between 40 and 49 years of age said they would live a comfortable lifestyle in retirement, with the remainder indicating that their lifestyle would be modest and require government assistance.
“Gen Y’s are certainly confident in their ability to save for the future and enjoy a comfortable retirement,” Mr Flavell said.
“Unfortunately, it is clear that a large proportion of Australians don’t share this level of optimism. To those Australians who are worried about their retirement and whether they will have enough money to enjoy a comfortable lifestyle in their twilight years, I would say: seek professional advice.
“An adviser can alleviate the feelings of uncertainty and stress by helping you get on top of your finances in the years before retirement.
They will provide you with strategies to better manage your money. In addition, they will track your progress, thereby giving you greater confidence in planning for the future.
“At the end of the day, it doesn’t matter if you are young or old, asset rich or have just bought your first home, a financial adviser can help you plan and prepare for your retirement so that you can enjoy those years.
“Australians who wish to enjoy their retirement and make the most of their twilight years really need to starting planning for this time in their life as early as possible.
“As the old adage goes: ‘don’t put off till tomorrow what you can do today.’ Speak to your adviser and start planning for your retirement today.”