November 17, 2016
A majority of Australians are concerned they will not have enough money to retire comfortably, new data has revealed.
According to Mortgage Choice's Diversified survey, 65% of Australians believe they will not have the funds they need come retirement.
“While alarming, this data is not surprising when you consider that most people don't start thinking about their retirement until they're over 50,” Mortgage Choice chief executive officer John Flavell said.
“According to our survey, 54% of Australians will not give their retirement serious thought until they are 50 or older.
“Of course, many don't realise that 50 is simply too old to start saving and planning for retirement. In reality, people should start their retirement planning much earlier in life.”
Mr Flavell said he understood how planning for retirement can seem like an unnecessary task to those in their 20s or 30s.
“People don't want to give their retirement serious thought when they are younger because it is not something that is going to affect them any time soon,” he said.
“However, with people living longer than ever and therefore needing more money in retirement, it's important to be financially prepared for your twilight years.”
According to the Association of Superannuation Funds of Australia, couples will need approximately $640,000 in savings, while singles will need approximately $545,000 in order to live a comfortable lifestyle in retirement.
“When you consider how much money Australians will need in order to retire comfortably, it is little wonder why it is so important to start the planning process early,” Mr Flavell said.
“Furthermore, most people don't realise that they may head into retirement with debt hanging over their heads, which can have a significant impact on their savings and cash flow.
“Over the coming years, statistics suggest that many Australians will reach retirement age and still have a mortgage. Soaring property prices combined with the fact that people are taking out home loans later in life, will ensure many still have debt in their twilight years.”
For this reason, Mr Flavell said it is imperative for Australians to start the retirement planning process as early as possible.
“As the old adage goes: don't put off til tomorrow what you can do today.
“Australians should seek out financial advice early on in their financial journey, and put strategies in place today that will help them achieve their financial objectives and lead a comfortable retirement.”