AUSTRALIANS’ retirement savings and investments will run dry within just 10 years of finishing work, alarming new figures show.
The significant shortfall makes Australia’s retirement status the worst in the Asian region and the fourth largest gap globally, HSBC’s Future of Retirement report has found.
And almost half of the nation’s population (44 per cent) are not afraid to concede they have inadequately prepared for retirement or have not prepared at all.
The report, which surveyed 16,000 people worldwide, also found among Australian respondents 16 per cent believe they will never be in a position to full retire compared to the global average of 10 per cent.
Australians expect their retirement to last 23 years but the shortfall of 13 years is among the worst of the 15 markets surveyed.
An ASFA spokeswoman said people are living longer in retirement than ever before — the average life expectancy in Australia is 83 — and they need to prepare for this.
“It’s important they plan to save enough so they can live comfortably for all of their post-work years,’’ she said.
“The earlier you start saving the more you will benefit from the magic of compound interest.
“For example, if you’re 30 years old, having just one less cup of coffee per day and putting the extra money into your super can add over $125,000 to your final superannuation balance when you retire.’’
ASFA data released last year showed in 2011-12 the average super balances of Australians was $197,000 for men and only $105,000 for women and most retirees would need to rely on the age pension in retirement.
The HSBC report found that paying off a mortgage or other debts was a significant barrier a majority of Australians (51 per cent) to financially prepare for retirement.
HSBC’s head of retail banking and wealth management Graham Heunis said “Australians are in denial about retirement planning.”
“Being concerned is not enough — the next generation need to take action and start saving now.”
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