A growing number of Australians are increasingly concerned about their ability to maintain financial security in retirement. Millions of Australians face financial hardship in retirement, new reports warn, with recent studies revealing a significant gap between current savings and the amounts needed to live comfortably.
According to a Finder survey, around 20% of Australians fear their superannuation and other investments won’t be sufficient to support them in retirement. Additionally, one in five anticipate having to reduce their spending just to make ends meet during their later years. Retirement Essentials
The Association of Superannuation Funds of Australia (ASFA) recommends that singles accumulate around $595,000 and couples about $690,000 in retirement savings to enjoy a comfortable lifestyle. However, the Australian Taxation Office (ATO) reports that the average superannuation balance is approximately $172,000, with median balances even lower — around $66,000 for men and $52,000 for women.
Pascale Helyar-Moray from Finder cautions that “insufficient super or savings could see millions of Aussies facing financial strain in their later years.” This shortfall has many rethinking traditional retirement plans, with some considering “micro-retirements” — shorter, planned breaks from work every five to ten years — while others are using strategies such as salary sacrificing to increase their super contributions.
“More and more people worry that retirement will come before they have enough money saved,” Helyar-Moray explained. “And relying solely on the Age Pension might not be an option for everyone, especially if your assets disqualify you.”
The research also found that 27% of Australians remain unsure whether their super will cover their retirement needs, and 10% expect to rely on other investments to fill the gap.
To improve their retirement readiness, experts recommend Australians take proactive steps such as:
- Salary sacrificing to benefit from the lower tax rate (max 15%) on super contributions;
- Regularly reviewing their super fund’s performance and fees;
- Ensuring employers are making their full 12% Superannuation Guarantee contributions on time.
Helyar-Moray emphasizes, “Don’t get stuck in a poorly performing fund. Small changes now can make a huge difference to your financial security in retirement.”
This situation underscores the importance of proactive retirement planning and the need for Australians to take control of their financial futures to ensure a comfortable and secure retirement.
