Analysis of retirement in Australia, the US and the UK has revealed that only 23 per cent of Australians expect to retire fully, either due to lifestyle choices or financial pressure.
This is compared to 32 per cent of Americans and around 27 per cent of people in the UK.
According to the report: “While some of these respondents may be choosing to continue working as a lifestyle choice, many are likely feeling financial pressure to continue working, and do not foresee a time when they will be secure enough to retire.
“Even more striking perhaps are the small percentages of those who do plan to retire who expect to retire fully as opposed to gradually; only a quarter of all respondents indicate plans to retire fully.”
The Retirement Readiness survey, conducted by American Academy of Actuaries, the UK’s Institute and Faculty of Actuaries and Actuaries Institute Australia, took a snapshot of retirement intentions in all three countries.
Its findings include:
- 70 per cent of Australians plan to take some form of retirement, compared to 75 per cent in the UK and 60 per cent on the US
- of those Australians who will retire, 46 per cent expect to have a comfortable or prosperous retirement, compared to 47 per cent of Americans and only 36 per cent in the UK
- 50 per cent of Australian male retirees expect a ‘flourishing or comfortable lifestyle in retirement’ compared to just 34 per cent of Australian women
- the gender gap is highest in Australia at 22 per cent, while the US is 15 per cent and the UK is seven per cent
- overall, 85 per cent of higher income earners would retire, compared to 76 per cent of middle-income earners and 57 per cent of low-income earners
Perhaps most disturbing is how little people are aware of how much they’ll need in retirement. In Australia, just 30 per cent of those surveyed knew how much they would need to live out their years, compared to 31 per cent in the US and 19 per cent in the UK.
YourLifeChoices Retirement Affordability Index™ September 2017 shows that a staggering 81 per cent of Australians believe they will run out of money before they die.
These numbers reveal that many retirees will in some way need to rely on government assistance in retirement.
“A great number of people expect to rely, in part or in whole, on some form of government payment during their retirement. 58 per cent of respondents expect to live a poor or modest lifestyle during retirement. We are immersed in an era of diminished expectations compared to the period even two decades previous,” said Australian Actuaries Institute President Jenny Lyon.
The report shows that, despite the differences between these three countries, retirement expectations are relatively similar. And although all three countries are working towards improving the retirement income system to accommodate a rapidly ageing population, progress to date “has been modest at best”.
What were/are your expectations in retirement? Do you think you’ll have enough to live out your years? Is the Government doing its part to help see you through? Were you aware that the gender gap was so high in Australia?