Getting harder to retire
GENERATION X wants to retire at 63 but believe they will need to work almost a decade longer to be able to afford it.
Research by ING has found that Gen X – those aged 39 to 53 – believe they will need an average $1.5 million nest egg.
However, they don’t believe they will reach that financial milestone until age 72, and more than half are yet to start planning for retirement. Generation Y – aged 24 to 38 – want to retire at 61, believe they will need more money – $1.74 million – and won’t have that until age 68, the research found.
ING head of retail banking Melanie Evans said the findings suggested a lack of knowledge about superannuation and retirement among people under 50. Some were unsure where to start, others focused more on mortgages and short-term living expenses, and many wanted to maintain or improve their lifestyles when they retired “and know that comes at a higher cost”.
“Many of them haven’t sat down and worked out a plan so they’re just making assumptions,” she said. Ms Evans said it was never too early to start retirement planning, and getting advice was important.
“Start seeing super as your money,” she said. “It’s nearly one in 10 dollars you earn.
“Track it as you would a savings account or mortgage.”
The research involving 2000 people also found Baby Boomers were more likely than younger generations to spend their children’s inheritance.
“As the first generation with superannuation earnings for a large portion of their working life, they also feel as though they’ve earned it and it’s theirs to enjoy,” Ms Evans said.
Pivot Wealth founder and financial adviser Ben Nash said young generations had high aspirations for retirement and did not feel that the pension would be enough. The age pension pays a maximum of $907.60 a fortnight and for Generation X and younger cannot be claimed until 67.
Generation X wants to retire – but they may be in the workforce longer than they’d like