Gaps between reality and expectations of super
Baby Boomers have the largest superannuation gap in terms of their estimation of how much super they will need for retirement at $500,516, according to a report.
RaboDirect’s latest ‘Financial Health Barometer 2017’ report found that Gen Y had the lowest gap at $220,925.
This correlated with the findings that 55 per cent of Gen Y believed they would have enough super to fund either a comfortable or modest retirement, followed by 31 per cent of Gen X, and 30 per cent of Baby Boomers.
Baby Boomers super at retirement expectation stood at $295,824, while Gen X was at $392,554, and Gen Y at $421,683.
Overall, 44 per cent of Australians believed that they would run out of money in retirement.
The report also found that 18 per cent of Australians did not believe they needed a financial plan as they relied on an inheritance.
Speaking at the launch of the report, head of RaboDirect, Bede Cronin, said it was concerning to see a large disparity between what Australians expected to need to retire with versus what they actually had.
“The report, and incoming changes to the super system, highlight a critical need for Aussies to take stock of their super and savings to plan for the future,” he said.
Also speaking at the launch, Rabobank acting general manager, marketing and communications, Glenn Wealands, noted that the correlation between those people who felt like they were going to be comfortable and that super would play a sufficient role for that comfort in retirement was not linked absolutely to salary.
“There’s a stronger correlation linked to those people who have an understanding of their budgets and current finance today, have a plan, and absolutely monitor on a regular basis their progress,” he said.
“That more strongly correlates to feeling comfortable in retirement as opposed to those saying ‘I’m earning money but what am I doing with it’. So the theme here is not so much absolutely the amount of salary that you earn, it’s living within your means and able to monitor your progress along the way is a key take out.”
Wealands also said that there had been a flight particularly from the older population to live more simply, and that health and happiness were the main goals of retirement.
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