Retiring on a pension? Or something better planned? ….…. education and planning key in raising super levels
Nearly 80% of people consider super the ‘main nest egg’ for retirement, yet only a third of those over 50 think they will be self sufficient once they leave full-time work.
According to a survey, published earlier this year by the Institute of Chartered Accountants (ICA), 52% of respondents said they would need additional assistance from the government during retirement.
While only 33% of people aged 50 years or older said they would be self-funded for their retirement, the news was better for Generation Y, with 52% of 18-24 year olds confident about their independence in retirement.
Just 27% of respondents were contributing additional funds to their superannuation, beyond the compulsory 9% employer contribution.
ICA chief executive Graham Meyer said 79% of respondents indicated super was their main investment for retirement, yet most Australians were headed to retirement believing they will rely on a government pension.
“Yet, because many employees do not consider its benefits, once they have signed the product disclosure statement, many appear to put [retirement funding] on the back burner and not consider making additional contributions in order to save for their retirement,” Meyer said.
“Having basic financial literacy skills will enable many Australians to make financial decisions about their future. Also, going to see a financial adviser can assist in developing an overall strategy to ensure you have enough money to retire.
“If more young Australians start making additional contributions to their superannuation earlier rather than later, then as the research indicates, they will be able reap the benefits of a more sustainable superannuation fund that will supplement them during retirement.”
Tags: pension, retirement, Superannuation