Australians are underprepared for retirement according to new figures.
New research has found that many Australians do not know how much money they have in their superannuation fund nor how much money they will need in retirement.
The research, conducted on behalf ANZ, found that 41 per cent of the population do not feel well informed about their retirement savings and 15 per cent did not know their superannuation balance.
The ANZ research also found that 38 per cent of Australians believe a superannuation balance of $300,000 or less will be sufficient once they stop working.
Current advice from the Association of Superannuation Funds of Australia (ASFA) suggests people will need almost double that amount to live comfortably in retirement.
In order to have a ‘comfortable’ retirement, single people will need $545,000 in retirement savings, and couples will need $640,000, according to ASFA advice. These figures are based on the presumption the home is owned outright.
ANZ Wealth’s head of superannuation Mark Pankhurst told news.com.au it was a worry so many people were disconnected from their superannuation.
“People are confused about super and they think it’s complicated,” he said.
“We need to simplify it and make it much easier for people to check their balance, they should get in touch with their super fund.”
ASFA Chief Executive Dr Martin Fahy said Australians should be checking their super balances at least quarterly and contacting their funds if they are confused or have questions.
“The more you get to understand the beauty and simplicity of super as a savings tool, with its tax and compound interest benefits, the more you will realise the dream of living longer and healthier through your super investments,” Dr Fahy said.
The fact that so many Australians remain disengaged from their retirement planning is extremely worrying.
Some of our own research at YourLifeChoices has shown the effects of this poor planning.
In our last Retirement Affordability survey from March, 22.96 per cent of retired respondents reported that their standard of living in retirement was worse than they thought it would be.
When we asked retirees whether the information they sought to plan their retirement was sufficient, 24.19 per cent of respondents answered ‘No’.
The ANZ research suggests that rather than people becoming more engaged about their prospective retirement, the situation continues to deteriorate.
At the very least, Australians should check their super balance regularly, contact their main fund and consolidate any lost or missing super.
It also pays to review the insurance and investments within your superannuation fund and assess the fees and charges on your account to see if you can get a better deal elsewhere.
For those of you who have continued to work long past retirement age, tax-deductible contributions to your superannuation are available to individuals under the age of 75, including those who are self-employed or employed and don't meet the 10 per cent income test. The work test still applies for those over 65 years of age.
We are keen to hear your thoughts on Retirement Affordability. Next week we will launch our regular survey so keep an eye on your inbox if you wish to take part. Participants will be in the running to win a $500 wish card.