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92
per cent of people approaching retirement
are very short of savings.
A recent study by Investment Trends has
highlighted the extent of the financial
under-provision of people approaching
retirement, as well as the harsh impact
on their retirement plans caused by the
GFC. The study is based on a survey of
2861 people aged 40 or more.
Key findings include;
- Fewer than 1 in 10 of the people
surveyed (only 8 per cent) had enough
super to achieve the generally accepted
benchmark of $40,000 per annum of retirement
income. For those already retired, the
average income from their savings was
only $19,000.
- The average time by which retirement
would be pushed out due to the impact
of the GFC was 2.9 years, increasing
to 3.7 years for those who are within
5 to 10 years of retirement.
- For those who had 5 to 10 years to
go until retirement, the average in
their super balances was $71,000, and
for those 1 to 3 years from retirement,
it was $140,000.
A $40,000 annual income is regarded
as the minimum needed for a comfortable
retirement, and is calculated at 65 per
cent of average pre-retirement income.*
Based on these figures, the average savings
would only last for 3 or 4 years, meaning
that once they were depleted, all that
would remain would be the age pension,
which, depending on your income and assets
situation is currently around $14,615
annum for singles and $24,414 per annum
for couples.
What is clear from the study is that
the overwhelming majority of the people
nearing retirement are going to outlive
their savings, and they do not have a
strategy in place to change this fact.
To appreciate what this means, sit down
and work out a monthly budget to come
out on say, $2,000 per month. Then realise
that this would be your lifestyle for
the next 30 or 40 years, or even longer,
given the increase in life expectancy.
This reality is hitting pensioners today,
and it will continue to hit all those
who fail to make provision for their retirement
years in the years when they are still
earning a salary.
If this sounds like you, and you don’t
have a strategy, and don’t like
what is waiting for you down the track,
or if you would like to learn more and
discuss how McCarthy Group can assist
you, click
here.
Reference: “Retirees
feeling the pinch”, Sydney Morning
Herald, Weekend edition, 4-5 December,
by Annette Sampson
*AMP/NATSEM Income and
Wealth Report
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