60 per cent of retirees will run out of money

New research shows more than 60 per cent of retirees will run out of money before they die.

Most retirees will run out of money

New research released by Mercer this week shows more than 60 per cent of retirees will run out of money before they die.

The average Australian will have only enough savings to last 14 years beyond retirement and is expected to outlive their savings by five years.

Committee for Sustainable Retirement Income executive director Patricia Pascuzzo said that Australians generally needed a retirement income of about 60–70 per cent of the pre-retirement earnings.

She believes that more needs to be done to nudge people into the appropriate solutions as one in five retirees are drawing down on their super at an unsustainable rate.

“You’ve got more and more people who aren’t living with the peace of mind in retirement that they could have if they were given better support in the lead up and during retirement,” she said.

“This highlights the importance of making the most efficient use of their super balance and all their assets, including their house, in retirement given that many are not going to be self-sufficient and still reliant on the aged pension.”

Are you concerned about running out of money before dying? How have you approached money management in retirement?

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    3rd Oct 2017
    Is that savings, superannuation coupled with the Aged Pension? If yes, then there is scope for money management in the first few years and the pension in later years. If only savings then factor in the pension and if smart could have reasonable retirement.
    3rd Oct 2017
    being a carer I dont have any retirement fund .life is hard enough now i see no change in my old age
    1st Aug 2018
    tisme A lot of people like us do not have retirement funds, If you are female then you are less likely to be financial if you have not been working. We just need to simply and enjoy life the best we can and not worry,
    3rd Oct 2017
    Of course retirees run out of money. When I retired there was no incentive to save.
    They told me after I retired with illness, I could draw my super 10 years early, so I drew the lot and put it in the bank account where it was more accessible.

    Then my disability pension was cut short fortnightly, for having more than $70,000 in the bank and then cut further because the interest on my saving was treated as income, and then I had to back pay money, because the super landing in my bank account was excess income, until my rate was adjusted.

    How did this affect me. I drew all the money out of my bank account and spent it.
    3rd Oct 2017
    Makes sense to me Charlie, Living on the pension is fine, if you have set yourself up before you retire. I owned my home, cars & all the equipment & toys I wanted, all in good condition.

    Over the last 12 years I have managed to replace my big fridge, stove, air conditioning, a couple of water tanks & the house guttering, [essential with no town water], & rebuilt the fernery all on the pension without trouble. It does help if you don't drink, smoke or gamble but retirement preparation should include giving these up for your physical & financial health anyway.
    3rd Oct 2017
    Everyone has a different situation. 60-70% depends on many factors including whether your mortgage is paid off or not, what sort of travel and holidays people expect to be able to take and many other factors. It almost needs a financial adviser to work out each and every case to advise people how to plan correctly.
    3rd Oct 2017
    Our Federal Gov. will have to stop putting the boot into self funded retirees,they are people that have done the right thing and should be at least given a pension card with out any financial reward perhaps.
    3rd Oct 2017
    Here we go again. Doom and gloom.
    Will the polar bears still be there to eat me or will they be extinct before me!
    3rd Oct 2017
    We live in the lucky country ... Earn and save and live within your means
    We have a good health system and all who wish to have a roof over their heads
    If you spend all your money as you earn it course you are not going to live the high life in retirement
    3rd Oct 2017
    3rd Oct 2017
    Earn and save and live within your means. Great advice.
    My father's advice was "Live simply so we can all simply live.
    8th Nov 2019
    Get real! All this sanctimonious stuff makes me seriously fed up.

    You say that all who wish to have a roof over their heads. Did you never hear about the women who are left almost destitute after a divorce later in life?

    Did you never hear about men, who after a divorce and dividing their assets, no longer have sufficient to buy a home?

    Did you never hear about all the young, and not so young people who simply cannot afford to buy a first home because of the way prices have gone up?

    Did you never hear about people who have sold everything to fight an illness in the family?
    Chrissy L
    3rd Oct 2017
    It is not helpful that the Government sets a minimum amount you must withdraw from you income stream if you have some superannuation. It would be more beneficial to retirees if individuals could determine their income stream payments relative to their own individual financial situation. I try to save any excess, but with low interest rates it will probably get gobbled up with inflation. It would probably earn more interest if it was left in Super so it could earn higher interest and therefore last me longer.
    5th Oct 2017
    There are accounts that pay higher interest if you pay in regularly and don't withdraw. There are also very low cost market investment firms that will allow access to the same investments super firms use.

    They even work out the annual tax statements for you.

    Superannuation isn't an investment class but a forced saving vehicle for PAYG workers.
    3rd Oct 2017
    It depends on what you want to do in retirement. We want to travel, so yes we are spending more while we are younger and fitter. It could be that we run out in our eighties, but then we could sell the house and downsize.
    one up
    3rd Oct 2017
    I had best hurry up and die

    3rd Oct 2017
    Government protecting seniors??? Phooey!! They've just reduced the assets test, and those of us in our seventies worked more than half our lives expecting to go on a retirement pension, before superannuation became available and compulsory, and successive governments turned our rightful entitlements into general revenue and spent it!! They should be made accountable for this by offering those pensioners a full aged pension to compensate their reckless spending of pension entitlements that were specifically deducted from our wages over many years. No wonder we are running out of money!!!
    3rd Oct 2017
    If I'm going to be penalised for putting more than $25,000 (salary sacrifice) into super every year & risk losing it anyway (everyone else wants to get their hands on it) why would I put it in there in the first place? What are the chances of us getting it back when we need it? It has been so hard earnt! I'd rather put my hard earned $ towards my mortgage so at least I'll have somewhere to live when I can't work (tho it's likely I'll even be penaliised for doing that if I ever need a nursing home in a few years as they make you sell your house & give them all your money whereas if you dont own a house you can still get into nursing home!)
    Working hard all your life means you get screwed over one way or another!
    20th Nov 2017
    Our gen of retirees started on only 2% Super contributions so no wonder yet another research study stating obvious facts we already all knew!! Most will be forced to sell their homes, even if just ordinary 3brm 40+yo ones on average blocks to survive since the Age Pension was cut from % increases based on basic averaged income rate to their now retirement yrs based on very low CPI & lowest ever (for approx 6yrs) %interest rates on savings + huge Super losses due to GFC. Thoroughly fed-up with Pollies noses continuing to be "in troughs" funded by we taxpayers (including Age Pensioners via GST) & ignoring that plight. YES, of course most of us we will run out of funds in mid-70s, just when need to continue paying for expensive Health Insurance to ensure we're able to have access treatment for common stuff like knee or/and hip replacements;cancer treatments; cataracts; heart ops; dental probs & dentures etc etc. Gotta laugh, too damn ridiculous that costs a $25 donation to get a cataract repaired in 3rd world countries & $10,000 ea eye in Aus, country bragging abt being the best in the world by current PM!!??

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