Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver

By Newsdesk

November 23 2023
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As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save.

Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver

According to a recent Finder survey involving over a thousand participants, Australians estimate they need to squirrel away $641,223 for their retirements, a figure that's alarmingly twice the actual expected super balance at retirement.

This disconcerting gap highlights a burgeoning problem for the soon-to-be retired. Official data from the Australian Taxation Office (ATO) paints a stark picture, showing the average Australian male aged 60 to 64 has a super balance of just $402,838, while their female counterparts have even less, with $318,203 saved up.

To achieve the nearly $650,000 retirement goal, an individual would need to earn $33,397 each year, assuming a retirement age of 64 and an average Australian lifespan of 83. This goalposts seem to be constantly moving, with The Association of Superannuation Funds of Australia (ASFA) suggesting retirees need between $595,000 and $690,000 for a couple — figures that are only set to rise further.

Sarah Megginson, personal finance expert at Finder, voiced concerns over the widening gap between retirement expectations and reality: "Thousands of Aussies are facing a huge deficit when it comes to the size of the ‘nest egg’ they think they’ll need to retire with and the amount they’ll actually have."

She highlighted the increasing life expectancy and cost of living in Australia, urging that retirement savings will need to stretch further than ever before.

The survey also revealed generational differences in expectations, with Baby Boomers estimating a need for $545,548, Gen X aiming for $751,813, Millennials looking at $628,191, and Gen Z anticipating $594,909 for a comfortable retirement.

Megginson offered advice to those looking to maximise their retirement funds. "It’s really easy to forget about super because you can’t access it now, but it’s actually your money, so make sure it’s working in your best interests," she advised.

Amidst the dire projections, Megginson recommends retirees-to-be review their super funds for performance and fees, ensuring they aren't paying exorbitant fees and that their funds align with their risk profiles. She also stressed the importance of consolidating super funds to avoid unnecessary fees, thereby preserving more for retirement.

This wake-up call to assess superannuation arrangements encourages Australians to take charge of their retirement planning and to ensure their golden years are as comfortable as the nest eggs they've long envisioned.

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Retirement