Older Australians are worried that they won’t have enough money to fund their retirement, according to the findings of YourLifeChoices' latest Friday Flash Poll: Revealing the reality of retirement.
Of the 1639 survey participants, just over one third of the respondents were confident that they’d have enough money in retirement, but 65 per cent said they would not have enough or were unsure.
These results are a direct rebuttal of the Grattan Institute’s claim that there is "more than enough money in retirement". And this reaction is not only backed up by numbers. We asked, “Do you agree with the Grattan Institute’s claim that you have enough money for retirement?” and 57 per cent said ‘no’, 22 per cent were ‘unsure’ and a mere 21 per cent said ‘yes’.
Of those who responded, 18 per cent were on a full Age Pension, 26 per cent on a part Age Pension and 31 per cent are fully self-funded retirees, 17 per cent are employed, five per cent are on other pensions, and three per cent listed other personal circumstances.
When asked how much money our members have in super, 13 per cent said less than $10,000, 15 per cent had less than $100,000, 37 per cent have between $100,000 and $500,000 and 23 per cent have between $500,000 and $1.5 million.
Only two per cent of our members have the Association of Superannuation Funds of Australia (ASFA) recommended $1.6 million for a comfortable retirement.
Just a quick calculation of our own survey responses highlights the flaws in giving recommendations based on averages. We loosely totalled the top half of superannuation balances ($800,001 or more) using the lower number in each bracket, then averaged it out among all 1639 respondents. The total super balances of our participants would then be $143,197, whereas, in reality, around one third of our respondents had less or much less than this amount.
One of Grattan’s recommendations is to forgo government plans to increase compulsory super contributions from 9.5 per cent to 12 per cent, with the institute saying Australians would have lower quality of life during their working years than they would in their retirement years.
We asked older Australians if they would have welcomed 12 per cent compulsory super contributions instead of 9.5 per cent when they were saving for retirement – 75 per cent said they would.
YourLifeChoices members questioned the wisdom of people on high incomes handing down recommendations concerning the welfare of those living on much less.
“It is okay for these people to say we have enough as their retirement money is large compared to the ordinary people because of their income! The same with pollies and their retirement fund. They don't care about everyday Aussies, which is why some of them are ‘cock of the hoop’ with huge pay packets. These people should try living on a pension for six months, without touching their bank account,” wrote YourLifeChoices member, ronloby.
Many criticised the gap between the Grattan Institute’s claim and the reality of retirement.
“I was amazed by the results the institute came up with. Does not fit the reality as I know it. I myself am on the full Age Pension. The self-funded retirees I know aren't living in clover, either. The insecurity of their investments is causing some heartache. Things like dental health can have a big impact as people are older. Who did the institute interview? Crazy,” wrote rtish.
“If we go with the ideas the Grattan Institute puts forward, and the government pushes, we will end up with more aged people on pensions and struggling and the next generation having nothing to look forward to. It's just silly to whine about retirees being well off, especially when large numbers are not. But it's sillier still to be attacking retirees who are moderately comfortable and trying to make them poor. The huge superannuation concessions to those on high incomes are the problem, and it's simple to address. But the rich will NEVER address problems caused by excessive benefits for the rich,” wrote OnlyGenuineRainey.
One thing is for sure, the Grattan Institute has stirred up an interesting debate and raised issues that are in need of addressing. Now, if we can only look past the numbers and get the facts straight, maybe we can find a solution to the harsh reality of retirement being lived by real retirees.
Do you think it’s right for those seemingly out of touch with retirement reality to be giving recommendations for the future of retirement?
Are you worried your money won’t last? The RetirePlanner™ tool has all the information you need.
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