Not having sufficient funds for retirement is a cause for alarm among Baby Boomers in Australia with more than half expecting to run out of money after retiring. According to the latest RaboDirect National Savings and Debt Barometer, Baby Boomers expect to retire with $400, 000 in superannuation which is half of what they think they will need to fund a financially secure retirement.
The opportunity for Boomers to take action is apparent, with less than a third of Boomers saying they are saving for retirement. Almost 23% of Baby Boomers think that, other than themselves, the government is responsible for ensuring they have a financially comfortable retirement.
With super funds reporting very modest returns for End of Financial Year up at just 0.5%, RaboDirect is calling for more to be done to address the issue of financial well-being for Boomers during retirement.
Renee Amor, spokesperson for RaboDirect said “Australia’s ageing population is showing worrying signs about being significantly underprepared for retirement. Our most recent Barometer shows that even if Baby Boomers doubled their superannuation balance between now and retirement, they would still only have approximately half of what they need. There also seems to be a huge disparity between the returns being made in these markets and what boomers with super believe will happen in terms of retirement funding return.
“The issue of Boomer Australians carrying debt into retirement is a matter for individual action based on a person’s circumstances. But the trend should also prompt our policy makers with a clear imperative to do more to encourage greater saving both inside and outside of super. Australians heading into retirement saddled with debt sends a very clear signal that more can be done.
She went on to say there are specific steps Boomers can take to improve their financial situations.
“With less than a third of Baby Boomers actually saving for retirement, RaboDirect is calling on all Australians to act now for their financial well-being during retirement by taking some simple steps today. Put a savings plan together; ensure your hard-earned cash goes into true-to-label high interest savings accounts that don’t charge fees; and start to engage with your superfund and if it isn’t performing for you, speak to a professional about which funds and investments best suit your life stage and financial needs.”
- Baby Boomers expect to retire with $400,000 in superannuation which is half the amount they think they need. They currently have $200, 000 in funds
- Despite share market turmoil and their proximity to retirement, on average Baby Boomers still expect their super balance to double between now and their retirement
- Even if Baby Boomers doubled their super balance between now and retirement, they acknowledge that it will only give them around 50% of what they need
- As a consequence, 57% of Boomers believe they will run out of money during retirement (compared to 48% Gen X and 31% Gen Y)
- Only 32% Boomers are saving for retirement (29% of Baby Boomers say they are saving for a holiday)
- 22.7% Baby Boomers think the government has the primary responsibility, outside of themselves, for ensuring they have a financially comfortable retirement