Survey reveals majority of Australians don’t have enough super to retire comfortably

Chilling new research has revealed one of the biggest Australian dreams is now well and truly out of reach for most of the population.

Most of us dream of the day we can clock off work for good – but an alarming new survey has found a huge number of Australians can no longer afford to retire.

According to new research from comparison site Finder, around three in five – or 62 per cent of Aussies – are concerned about not having enough money in retirement.

And while a third said they would “manage” to retire but would have to cut back on spending in order to do so, while an alarming 28 per cent claimed they didn’t believe they will have enough superannuation to be able to stop work at all.

Just 18 per cent of Australians think they have amassed enough money to retire comfortably.

A big part of having enough super to retire on comes from making additional salary-sacrificed contributions, yet only 18 per cent of us make these extra payments to our super funds.

Those who are making extra contributions are paying $713 a month on average.

The research also found that men are much more assured about their ability to afford to retire, with 26 per cent confident they have enough money to live well in retirement, compared to only 11 per cent of women.

Alison Banney, superannuation expert at Finder, said low superannuation balances were a growing problem in Australia.

“Millions of Aussies are not actually able to save enough to walk away from their jobs,” she said.

“Most people aspire to retire in their mid-60s – but many don’t have enough for a comfortable retirement.”

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Women are especially concerned about their retirement prospects. Picture: iStock

Ms Banney said the current cost of living crisis made it even harder to plan for retirement, and she urged Aussies to pump up their retirement nest egg as regularly as possible.

“If you’re able to contribute a little bit extra to your super now, it will make a big difference by the time you retire,” she said.

“Making extra contributions isn’t the only thing you can do, though. The first step is to make sure you’re in a super fund that has low fees and a history of strong long-term performance.

“It’s also important to make sure you’ve only got one super fund in your name, so you’re not losing thousands of dollars to multiple sets of fees. If you have more than one, consolidate them as soon as possible.”

According to the Association of Superannuation Funds of Australia’s (ASFA) estimate of how much money you’ll need in retirement depending on your lifestyle, a single person aiming for a “modest” standard of retirement – meaning enough cash to cover the basics – will need $30,063 a year, or $575 per week to get by.

For couples, that jumps to $43,250 per year, or $828 per week.

Many Aussies will struggle to get by in retirement. Picture: iStock

Singles hoping for a “comfortable” standard – which will allow retirees to enjoy a range of leisure activities and to have a good standard of living including private health insurance, a reasonable car, household goods and holidays – will need $47,383 a year, or $907 a week.

That equates to $66,725 each year for couples, or $1278 a week – or a lump sum of $640,000 for a couple and $545,000 for a single person, assuming a partial Age Pension.

Both standards apply for people retiring at age 65 who own their own home and will live to an average life expectancy of about 85.

It comes as the latest SuperRatings figures revealed that over 20 years, the typical worker could be $95,391 better off in the average Industry SuperFund than the average retail super fund.

Industry Super Australia marketing director Alana Burnside urged Aussies to take advantage of the new “Compare the Pair” online tool which will help workers compare the performance of different super funds.

“Recent super reforms mean Australians can be stuck in the same fund unless they actively switch out,” she said.

“Compare the Pair prompts workers to think about their super and check if it is delivering them good investment returns, and those who made the switch 20 years ago are almost $100,000 better off.”

Originally published as Survey reveals majority of Australians don’t have enough super to retire comfortably