The thought of retirement conjures up images of carefree days enjoying cocktails by the pool or whiling the days away on the porch reading a book in the hammock.
But Aussies are feeling less assured that they will have enough money to fund their golden years.
New research shows one in three Australians are less confident (compared to a year ago) that they will be able to retire comfortably at 65, and only 13 per cent believe they have complete control over their retirement outcomes.
The study by Deloitte Access Economics measuring ‘financial consciousness’ tested 3000 people nationally to uncover their ability to make a change to improve their financial wellbeing.
Confidence in retirement outcomes changes dramatically with age, with Gen Z (25 to 34 year olds) and over-70s most confident about their golden years.
40 per cent of 45 to 54 year olds doubt they will retire comfortably at 65.
“Gen Xers are feeling pressure to build up their pension pots as retirement is on the horizon,” said Rod Attrill, general manager of banking at Comparethemarket.com.au, who commissioned the study.
“With superannuation contributions only becoming mandatory in 1992, it’s no surprise that some Gen Xers worry that their savings look a little slim, especially when we’re told we each need $545,000 in order to enjoy a comfortable retirement.”
A comfortable retirement seems even further from grasp for the one fifth (17 per cent) of people who said they would have to dip into their superannuation account if they were suddenly unemployed or unable to earn an income for more than three months.
27 per cent of men and 33 per cent of women reportedly have no superannuation set aside.
Comparethemarket.com.au has five tips to get the most out of your superannuation and prepare for retirement.
1. Consolidate your super
Your super contributions might be spread out over various funds that you may have lost track of. Use the ATO’s myGov website or speak to your super provider to consolidate any super accounts into one. This will reduce any fees and changes and you won’t have to worry about keeping on top of different funds.
2. Decide how much you will contribute into your super
Your employer must contribute 9.5 per cent of your income into your super, but consider whether you can afford to put extra away.
3. Consider making a gradual transition into retirement
Another option is choosing a gradual transition into retirement by winding back your working days in your final years in the workforce. By making a gradual change rather than jumping head first into retirement, this gives you time to adjust to reduced workload (and perhaps income). From a financial perspective, by hitting pause on full-time retirement you will be able to add more to your nest egg too.
4. Check your eligibility for the Age Pension
Don’t wait until it’s too late to find out if you’re eligible for the Age Pension. Your income, relationship status, or any property or items you own can affect your eligibility to receive either a part or full pension. Do your research now so you know what you’re entitled to receive.
5. Look into Pension Card discounts
With a Pensioner Concession Health Card, you can have access to cheaper medicine, bulk billed doctor visits and bigger refunds for medical costs.
On top of this, you can receive discounts on electricity and gas bills, property and water rates, public transport fares and motor vehicle registrations.