Millions of Australians won’t have enough superannuation to retire, survey finds

Millions of Australians fear they will be too poor to support themselves when they stop working, a new survey has revealed.

A survey of 1063 people by comparison site Finder found 23 per cent of respondents did not have enough money in their superannuation or other investments to get by in retirement — equating to a staggering 4.6 million Australians.

Another 27 per cent of people admitted they are unsure whether they will have enough money to survive once they stop working, while 22 per cent believed they would but conceded they would have to cut back on spending.

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Women were worse off, with 27 per cent saying they will not have enough in super or other investments to get by, compared with 18 per cent of men.

Consumer advocacy group Choice broke down how much people should have in their super to maintain their living standards when they retire, which is about three to 8 per cent higher than last year.

Someone hoping to spend about $36,000 a year will need to have $91,000 saved by 65, while a higher annual spend of $59,000 requires $777,000 saved.

For couples at the lower end of the spending scale, an annual spend of $52,000 will require $116,000 saved.

Meanwhile, if they want to spend $87,000 a year they will need $1,037,000 saved by retirement age.

Choice’s figures assume someone owns their own home outright when they retire, and combine the spending and saving of two people living together for couples

They also factor in additional income retirees may be entitled to from the Age Pension.

‘Too little too late’

Finder money expert Sarah Megginson said superannuation was something many Australians did not engage with enough.

“It can be a sad case of ‘too little too late’ for many who realise that by the time they reach retirement age, their super balance will fall well short of the amount of money they will need,” she said.

“The Age Pension is asset-tested in Australia so you may not qualify.”

Megginson encouraged Australians to take control of their super sooner rather than later.

“First, it’s essential to know how much you have in super and to consolidate your funds,” she said.

“You pay fees for each fund you have — it’s like having your savings split across three savings accounts and paying account keeping fees on all of them.

“It makes so much sense to bring it all together and spend less on fees, so more money stays in your name, working towards building your wealth.”

Megginson also suggested contributing to superannuation through salary sacrificing, if someone is in a position to do so, and ensure their chosen fund is good value for money.