“Our parents and grandparents told us so it should come as no surprise, rather a reminder that we should save more, save consistently and start earlier as well as make additional superannuation contributions if we want a comfortable life in retirement” states Andrew Frith SMSF specialist and CEO of The Self-Managed Super Specialists.
This reminder was borne out loud and clear by almost half (46%) of the retirees surveyed in the 2010 Investment Trends Survey of 1000 Australian retirees and pre-retirees. Those with insufficient funds may be doubly disappointed since of the 1000 surveyed, 50% expected to receive the Age Pension, where in fact only 31% are entitled to a full or part pension according to Tim Cobb, chief operating officer at Investment Trends.
The report found that many retirees expect to earn a lot from a little. Among those yet to retire, approximately a quarter expect a 10% pa return on their retirement savings. “Not being very realistic in terms of today’s investment returns which average out at about half of their expectations”, according to Andrew Frith.
Other results that the survey highlighted was that the pre-retirees underestimated their life expectancy and so too the amount of retirement savings they will need. The research suggests that respondents were only saving enough for 8 years of retirement rather than the 30 years or more they need. However, on a more positive note, prior to retirement Australians expect that they will need, on average, $56,000 a year to lead the lifestyle they want in retirement, whereas the average spend by retirees is $39,000 and this tends to decline to an average of $32,000 after 10 years in retirement.
“Perhaps some of these results plus the negative effects of the GFC are why more people are delaying their retirement and more present retirees are taking on part-time jobs” concluded Andrew Frith.
Leenane Templeton The Self Managed Super Specialists are located in NSW Australia and are…