Reality bites for retirees

Australians are becoming more realistic as to the level of savings required to fund a reasonable quality of life in retirement, with one in three recent retirees not having their post retirement expectations met according to a new survey.

The survey conducted by ANOP Research and commissioned by the Association of Superannuation Funds of Australia (ASFA) found seven in ten of non-retired people estimating they will need a minimum annual income of at least $30,000 per annum to maintain an adequate lifestyle in retirement.

“This research flags a significant shift in Australians' attitudes to savings and retirement. People are less under the ‘she'll be right’ illusion about retirement. They know compulsory super isn't going to be enough, and they're apprehensive about how they are going to fund an adequate retirement future,” ASFA chief executive Philippa Smith says.

In the inaugural study in 2001, a quarter of respondents identified $20,000 as the minimum level of annual income they believed they would require in retirement - this time around only 13 per cent quoted $20,000 as the minimum level.

"Delusion is dissipating. The message about the need to save more for an adequate retirement is starting to get through,” Smith says.

“The focus now needs to be on how to bridge the savings gap,” she adds.

The National Survey on Community Attitudes to Saving for Retirement, as it is known, polled a random sample of 755 Australians aged between 30-69 years throughout May and June this year.

Seventy per cent believe the Federal Government needs to do more to deal with the ageing population, with encouraging people to save for retirement among the top 3 suggestions along with better aged care facilities and improving the health system.

Smith says while there is less delusion this time around, in terms of what retirees need to fund a reasonable retirement, delusion has been replaced by anxiety and agitation.

“The challenge for government, and funds, will be to establish solid policies and mechanisms through which the growing numbers of anxious individuals - and our ageing community - can achieve an adequate retirement income,” Smith says.

Working in retirement is nominated as the best way of bridging the gap, with eight in ten respondents considering working longer, yet acknowledging it will be difficult to find or keep paid work at that time in their lives.