Australians are worried about running out of retirement savings, but experts say it’s possible to catch up

Worried Australians fear they will far outlive their retirement savings, but there’s an easy way to help crush your future financial concerns.

Exclusive: Worried Australians fear they will outlive their retirement savings and many regret not stashing more money away, a comprehensive new report has found.

The National Seniors Australia’s Feeling Financially Comfortable report surveyed more than 5000 Australians aged 50 and over during the past 14 months and found the following:

• 53 per cent worry they will outlive their retirement savings.

• 28 per cent regret not contributing more money to retirement.

• 31 per cent said contributing more was not an option.

Australians are living longer which means they ultimately need more money once they stop work.

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A majority of Australians are concerned they won’t have enough money in retirement. Picture: Getty Images

Figures from the Australian Institute of Health and Welfare showed Australia has one of the highest life expectancies in the world — in 2015 life expectancy for both males and females combined was 82.5 years.

National Seniors Australia’s chief executive officer Professor John McCallum said there has been a number of changes impacting retirees’ financial situation that gives them good cause for concern.

“The governments in the past 10 years have been making people feel insecure with constant budgetary changes,” he said.

“There’s changes in super, pension means test and the franking credit changes has been floated and it makes people feel very insecure.”

The Association of Superannuation Funds of Australia’s figures suggest to achieve a comfortable retirement a single person requires $540,000 once they finish work and a couple requires $640,000.

This assumes retirees own their home outright and are relatively healthy.

Investment manager company Challenger’s chairman of retirement income Jeremy Cooper said it’s better to get money into retirement early so it can compound. Picture: Sam Mooy

Investment manager company Challenger’s chairman of retirement income Jeremy Cooper said the findings showed more needed to be done to improve the retirement phase of Australia’s super system.

“People have realised we are living so much longer than we were 20 years ago, people were living to their mid 70s or 80s, but now it’s more like their 80s and into their 90s,” he said.

“It’s better to get your money (into retirement) early and let it compound and it’s even not so bad to be getting it in there in the middle of your savings journey or even at the end.”

Mr Cooper encouraged Australians to salary sacrifice while working into their superannuation, “where you are investing pre-tax dollars into super.”

“You will get a smaller pay packet because of what is going into super but it’s a tax effective way of doing it,” he said.

Mr McCallum also said “bill shock” was also a concern for many Australians, particularly once they stop work.

“Suddenly you could get a big power bill and something has gone off and you manage it through your credit card instead of paying it off,” he said.

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