More than 50 per cent of Australians will not have sufficient means to self-fund their retirement, with nearly one-third expecting to carry debt into retirement, according to a survey conducted by a consumer finance website.
The study conducted by Money.com.cu involved 1018 Australians, of which 573 were aged 35 to 60, found 60 per cent admitted they will not have the superannuation and cash to self-fund their retirement and 31 per cent expect to carry debts into their retirement, with 73 per cent expecting to receive the pension at some point.
It found a wide gap between people’s income expectations and their preparedness for retirement, indicating the majority do not have a retirement plan.
Alongside those expecting to retire with debts, 21 per cent expect to retire without having paid off their mortgage or renovation loan, while a small proportion (4 per cent) said they will still have major credit card debt or a car loan, while 2 per cent expect to be paying off a personal loan.
Money.com.au spokesperson and adviser Helen Baker said: “While the Retirement Standard increased these figures by around 2 per cent in the June quarter, the income levels that more than half of retirees expect to live on are still at least 27 per cent higher.
“Respondents have lived through several months of fast-rising inflation and interest rates, which is forcing them to factor price and loan repayment increases into their retirement preparedness and income expectations. People also have new desires – such as travel – after two years of COVID restrictions.
“The unfortunate reality is that to meet their expected retirement incomes, a large segment of the population will need to work longer or make significant sacrifices. Those who are already retired are also facing challenges as they are unable to build their super while contending with constantly rising costs, from health insurance premiums to interest rates and energy prices.”
The maximum pension singles receive is $1026 per fortnight, while the maximum for couples is $1547 fortnightly, with these figures reduced for those who retire with assets, savings or an income stream.
“The pension also isn’t keeping up with the inflation rate, nor is it a realistic amount for those who have debt, pay rent or have costly health expenses,” Baker noted.
“There is also a risk that those who are factoring a pension into their retirement plan might not be entitled to it.”