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Key Points
- Australians aged 50 and over lack understanding about retirement finances, according to new research from AMP.
- Three in four respondents had not sought financial advice, and three in five wish they had started planning earlier.
- The Association of Superannuation Funds of Australia estimates single people need $595,000 in retirement savings.
The superannuation and pension systems exist to set up and support Australians through retirement, but many people are unaware of how much super they need, whether they are eligible for a pension, or how to plan for their future.
Do you need a million dollars to be able to retire?
Matt Grudnoff, senior economist at the Australia Institute, said the cost of retirement varies depending on a number of factors.
According to the Association of Superannuation Funds of Australia’s (ASFA) Retirement Standard to have a ‘comfortable’ retirement, single people will need $595,000 in retirement savings, and couples will need $690,000.
He said amounts would also vary depending on retirees’ housing situations.
“Another really important thing to factor in is whether you own your home at retirement, because we found in our work that the amount of money you need if you’re say a renter compared to a homeowner is far higher.”
Australians ‘financially illiterate’ over retirement
Three in four have not sought financial advice, and three in five wish they had started planning for retirement earlier in life, AMP found.
“This lack of financial knowledge about retirement is despite Australia having one of the world’s highest GDPs and the fifth largest pool of superannuation savings in the world.”
What do you need to do to prepare for retirement?
“Some other really important things to keep in mind as well, making sure you’re in a good-performing superannuation fund and not being charged high fees,” he said.
“It’s the sort of simple answer that I think people are looking for and it’s the one answer that’s actually really difficult to give.”
