$43,310 adequate for retirement

Australians are on track for an adequate retirement if they’re prepared to live on an average annual income of $43,310 in today’s dollars.

That is the bottom line of the latest AMP Superannuation Adequacy Index released today, which revealed a seven per cent or $43 a week improvement over a similar survey conducted in December, 2006.

What is more, it revealed that an extra 300,000 people over the same time period were on track for what is deemed to be an adequate retirement.

AMP Financial Services managing director Craig Meller said that while the gains were strong, the impact of recent market performance would not be seen until the release of the June 2008 Index.

“We saw rapid adequacy gains in the first half of 2007 in the lead up to the Simpler Super reforms and a further modest, but more sustainable rise, in December, 2007,” he said.

“Although we expect super balances for the June 2008 Index to be impacted by the weaker markets, the extent of this depends on market performance up to the end of June, this year.”

Meller said that AMP did not believe today’s market conditions would significantly impact the longer term retirement assets and adequacy targets, in part because recent market movements were of relatively greater importance to those closer to retirement, whereas the index’s methodology factors in market fluctuations over the long term by averaging out investment returns.

“Our customer advice continues to be that it makes good financial sense to invest for the long term and not react to daily market movements,” he said.