Not enough money for retirement

Australians are planning to retire later with superannuation balances insufficient to live a comfortable retirement, says a new report from research group Roy Morgan.

Results of the Single Source survey of over 50,000 people show that the uncertainty surrounding the changes to super, coming into effect on 1 July, may be responsible for a significant shift in planned retirement age.

The average age of retirement has moved from 58 in 2014 to 61 in 2016, making it the highest on record – even surpassing the rise which followed the global financial crisis when the market was last hit hard.

Just eight years ago, the expected retirement age was 57.5.

Roy Morgan’s Industry Communications Director, Norman Morris, believes that the tightening of the Age Pension assets test, low returns on investments and uncertainty surrounding the new superannuation system may be the reasons behind the change.

“As we have seen, recent changes to superannuation rules and pension eligibility appear to be impacting on retirement age, with the result that people will retire later. This is a positive for Government retirement funding but could have negative ramifications for unemployment levels (as people work longer),” said Mr Morris.

The report also shows that while retirement balances have increased in the past few years, people planning to retire at 61 will still not have enough to see out their remaining years.

Key points from the survey include:

  • The average retirement balance for those looking to finish working at 61 is $286,000, up from $276,000 since 2014.
  • Average debt held by Australians planning to retire is $18,000, bringing the average retirement balance back to $268,000.
  • The average holding of non-superannuation assets fell to $106,000 compared to $117,000 in 2014.


The Association of Superannuation Funds of Australia (ASFA) states that to live a comfortable retirement, a couple requires an income of $59,619 a year. Industry Super Australia recommends that a couple needs a joint balance of $775,628 to live comfortably.

Based on these figures, people retiring at 61 with a balance of $268,000 would exhaust their super by the age of 67.

Another misconception raised in the report is the amount in assets Australians own outside of super. While official figures show that, on average, Australians own $85,000 worth of property investment aside of their own home, only one in five actually have residential property investments. Same goes for share investments – official averages claim that Australians own $37,000 outside of super, but only one in three actually own any equities, and business assets per household are between $30,000 to $45,000, but only one in eight households own business assets.

This underlines the importance for the Government not to trust ‘averages’ and to consider such inequalities when creating retirement income and pension policy.


Opinion: Figures paint a grim picture

While Australians looking to retire later in life may seem like good news for the Government’s budget, the figures presented in this report paint a grim picture of retirement for most Australians.

In theory, an increase in retirement age means the Government doesn’t have to fund so much of people’s income in this life stage. But when Australians have inadequate retirement funding and need to work longer, the repercussions on the economy and general wellbeing of older Australians still run deep.

As we all know, staying gainfully employed at a later age is not an easy task. And the jobs being held by older Australians mean that younger generations may struggle to find work.

What we need is improved financial literacy. Although superannuation was designed to supplement the Age Pension, many people don’t fully understand the rules, tax breaks and options that could help them make the most of the system.

When designing policy, the Government seems to rely heavily on averages, which is a flawed means of calculation. We need information that provides a realistic picture of retirement, not based on averages.

Our most recent survey, YourLifeChoices Insights Survey 2017, which has, to date, over 4200 responses, shows that over 27 per cent (of those who responded to the question) said they have less than $100,000 in super and other assets (excluding the family home). While just over 19 per cent of respondents actually have the recommended balance for a comfortable retirement.

Our survey also revealed that over 20 per cent of those who are retired did so between the ages of 55 and 59. Just over 17 per cent retired at the official retirement age of 65. Almost 30 per cent of respondents who have not yet retired plan to do so at the age of 70 or older.

Perhaps surprisingly, the reason for retirement is slightly skewed towards health and not savings.

If the Government does indeed plan to increase the official retirement age to 70 by 2035 as stated by former treasurer Joe Hockey, it needs to do more to improve education about the retirement income system. We’ll do our part, but our leaders who, in their ‘wisdom’ seem to be ready at every turn to strip retirees and pensioners of their right to live a decent retirement, need to take a long, hard look at how the system affects real Australians – and to cease this unrealistic basing of policy on skewed averages.

Do you think enough is being done to educate Australians about retirement income? Are you tired of policy being based on averages? Would you like to respond to our survey and help us create content that helps Australians better understand the retirement income system?

Related articles:
Do you have enough for retirement?
How much is enough for retirement?
Superannuation and the Age Pension

Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

Leave a Reply

48 hours in the capital city

2017 Senior Australian of the Year