Will you have enough money to retire comfortably?
For most Australians, improvements in the stock market have enhanced the retirement lifestyle they will be able to afford. But according to the latest AMP Retirement Adequacy Index, over 40% of the workforce is still not saving enough for a comfortable retirement.
The Retirement Adequacy Index (based on data to from June 2009 and produced by Access Economics for AMP), compares Australians’ savings against a target set at 65% of pre-retirement living standards. It also takes into account all 3 elements of the Australian retirement savings system: superannuation, the age pension and personal savings.
The Index found around 4.5million Australians do not have sufficient savings for a comfortable retirement; an increase compared to 6 months ago. Among this group, the average shortfall is 9%.
From January to June 2009, super balances rose on average by 6.9% per member, thanks to improvements in the Australian share market, which regained nearly half of the losses it suffered during 2008.
Average super contribution rates held steady at 12.5%. This was due to members aged over 55 who increased their contributions by 3.5 percentage points. Those aged under 40 decreased their super contribution rates. As a result, younger workers are now slipping behind in the savings they need to fund a comfortable retirement, while comfortable retirement incomes are within reach of most older workers.
The Retirement Adequacy Index showed no improvements in womens’ superannuation balances, with women remaining far behind their male counterparts. Female workers now face retirement incomes 17% lower than male workers. Females aged between 30 and 39 are experiencing the greatest shortfall in superannuation.
If you have any questions or would like more information about how these strategies affect you, please give us a call. To download the full report, go to www.amp.com.au/adequacy, or to find out how to make the most of your super, go to www.amp.com.au/super.
What you need to know
Information current as of February 2010. This article contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances. If you decide to purchase or vary a financial product, your financial planner, AMP Financial Planning and other companies within the AMP Group will receive fees and other benefits, which will be a percentage of either the premium you pay or the value of your investment. You can ask us for further details about this.
