A study examining how Australians expect to fund their retirement and how retirees actually finance their post-work lives has found while superannuation savings remain key, many will rely less on the age pension and look towards a broader range of income sources to support themselves.
The Investment Trends “2024 Super Member Engagement Report” found pre-retirees expected superannuation to make up 29 per cent of their retirement income, while retirees reported it currently funds 30 per cent of their lifestyles.
Those yet to retire believe they will derive most of their income from savings and investments outside of superannuation (20 per cent), their partner’s super savings (16 per cent), the age pension (12 per cent) and rental income from investment properties (8 per cent).
In contrast, retirees today rely more heavily on the age pension (23 per cent), savings and investments outside superannuation (13 per cent), their partner’s super (9 per cent) and equity release from their homes (9 per cent).
Investment Trends head of research Irene Guiamatsia noted the findings indicated the need for Australians to build their superannuation as the foundation of financial security in retirement.
“There’s a clear gap between expectation and reality on a few levels,” Guiamatsia said.
“Whether it’s the actual income required, the mix of funding sources to generate that income or even the preferred retirement lifestyle itself, but superannuation is the unwavering pillar members know they can rest on as they transition to the reality of retirement.”
She suggested superannuation funds have the chance to play a more proactive role in helping superannuants to better prepare for the realities of retirement, such as by offering information on how super works alongside the age pension.
“This is about empowering members to make better choices and take control of their future. Understanding how different income sources come into play can help pre-retirees to take action now to maximise their retirement income in the future,” she said.
The report was compiled from the results of a survey of 10,866 respondents conducted from February to March.
