Many Australians are considering working well into their 70s because they don't have enough money in their super to retire on.
It seems many don't want to be forced to live solely off the government pension and fear that their existing super balances won't last until their death.
Fairfax Media today reports that analysis of Australian Bureau of Statistics (ABS) data shows that the number of over-45s who say they will not retire before turning 70 has dramatically increased from 8% to 23% in the past 10 years.
The most common factor influencing people's decisions on when to retire was financial security, followed by personal health and physical abilities and reaching eligibility age for a pension.
Part of that has to do with our increased longevity – in other words, we are living longer than ever. Australia is just one of six countries where both men and women can expect to live till they're 80.
That means that unless we are happy to exist on a government pension, we need to have much more in superannuation, not only to ensure we have the living standards we expect, but also to cover the rising cost of health care.
According to a recent study by Deloitte, a 30-year-old male would need retirement savings of $1.58 million in 2048 to have a comfortable retirement. Another survey earlier this year revealed that 7 out of 10 retirees won't be able to retire when they want because they don't have enough super and savings.
This also comes when most younger workers appear to have unrealistic expectations, with many expecting to retire at the age of 52 on average. – That's 15 years before 67, the age when they would be eligible for the aged pension.
At the same time, the federal government is considering changes to super, including cutting back on concessions and limiting the amount of money that people can contribute to super.
Foolish takeaway
The lesson for all Australians is simply to start saving early and continue saving both inside the superannuation system and outside it. It could mean setting up a portfolio of diversified assets, including shares, property, cash and fixed securities – as we illustrated in a four-part series last year.
