The number of Australians intending to retire within the next year has been estimated at 415,000, according to new research put out by Roy Morgan Research. This is a 27% increase on the level recorded in 2008, when the figure was 327,000.
Roy Morgan says the magnitude of these impending retirements, coupled with what it found were largely inadequate average retirement savings, is likely to put substantially more pressure on the need to government retirement support in the not-too-distant future.
The research house says the 2016 average age of “intending” retirees is 61. It also found that their present average gross wealth (total assets excluding owner-occupied homes) is $306,000, which is up 32% from the 2008 average of $231,000.
(Roy Morgan industry communications director Norman Morris says that while the firm conducts research every year from more than 50,000 respondents, 2008 was chosen for the purpose of this particular study to give a comparison over a longer period.)
The role of superannuation in Australian retirement lifestyles has also increased, representing 64% of gross wealth today compared to 52% in 2008. The research found that the average debt level for this group is around $25,000, and that factoring this into overall outcomes results in an average net wealth of $281,000, which is viewed as inadequate for self-funded retirement.
“The overall conclusion from this is that intending retirees will be relying on government benefits for some time yet,” Morris says, “given the fact that the Association of Superannuation Funds of Australia (ASFA) estimates that an individual would need $545,000 and a couple $640,000 for a ‘comfortable lifestyle’.”
Roy Morgan Research says that given very low interest rates at the moment and the level of economic uncertainty, the amount required to fund retirement is likely to rise well above these levels.
Owner-occupied home a potential funding source?
The research house has also re-visited the idea that owner-occupied housing may be an untapped source of funding retirement. It found, for example, that a clear majority (83%) either own their own home outright or are near paying it off, with an average value of $495,000 per person — or 151% higher than the average held in superannuation.
“Not only have owner occupiers got a large potential source of retirement funding but the growth in the average value of their homes has increased by 50% per person over the last eight years compared to only 33% for other investments,” Morris says, while conceding that intending retirees who rent obviously do not have this large potential resource.
#[asfa], [pre-retirees], [reitrees], [retirement], [retirement savings], [Roy Morgan]
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