20 Oct, 2014
- RaboDirect Financial Health Barometer (FHB) research uncovers retirement ‘gap’ of $281k
- On a national basis the amount is a staggering $AUD 4.21 trillion* – equivalent to the GDP of Japan, the world’s third largest economy
More than one third of Australians are dreaming of an early retirement and a higher proportion of workers are more confident than in previous years that their superannuation will fund their retirement. These are the findings of the latest RaboDirect Financial Health Barometer released this month.
While this may sound promising, the research has also thrown doubt on just how realistic this may be by calculating a $AUD 4.21 trillion hole in the nation’s desired retirement pot, an amount that exceeds the GDP of countries such as the United Kingdom, Germany and India. The retirement dreams of sun, sand and surf look set to slip through the fingers of many retirees as the average working Australian faces a shortfall of $281k – this calculation reflects the difference between the amount retirees expect to have for their retirement and the actual amount they believe they will need.
The 2014 RaboDirect Financial Health Barometer (FHB) surveyed 2,300 Australians aged 18-65 and asked respondents probing questions about their retirement dreams as well as current retirement planning provisions and then assessed their preparedness.
According to RaboDirect’s Group Executive, Greg McAweeney, the results of the latest FHB reflect not only a monetary gap, but also a knowledge gap between what many workers expect to have in superannuation by the time they retire and what they expect to need to fund their retirement.
Mr McAweeney commented, “These are huge figures but what this boils down to is that many Aussies are underprepared when it comes to the amount they need to fund their retirement years. Australia has an aging population, which means future generations may need to fund much longer retirements. Essentially, we need our money to work harder for longer. Frankly, compulsory contributions just won’t cut it.”
He continued, “Every hard-working Aussie wants to be able to retire with enough of a nest egg to live well and while they’re young enough to enjoy it. Our FHB research reveals that for many this will remain a dream unless they start making smarter choices that will help them build their savings buffer.”