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Superannuation confusion is delaying Australian retirement

retirees superannuation savings retirement old age

Average age of intending retirees rises from 58 to 61.

Recent changes to Australia's superannuation and pension regulations has led to a substantial rise in the average age of intending retirees, quelling their numbers.

Roy Morgan Research reports the average age of Australians intending to retire in the next year has increased from 58 years of age in 2014 to 61 years of age in 2016.

Research findings suggest the increase is likely a reaction to recent changes to superannuation rules and pension eligibility, as well as economic uncertainty and low interest rates.

In 2014 there were 411,000 intending retirees in Australia. In 2016, this figure had reduced to 395,000.

Despite a volatile market and uneasiness surrounding low global growth, Australia’s superannuation funds returned positive growth in 2016, supported by a push late in the year as a result of the Santa rally.

A rising retirement age is favourable for the government and super funds but it could lead to higher unemployment, with ageing workers occupying positions younger people may otherwise have filled.

The average gross wealth (excluding owner-occupied homes) of intending retirees is $286,000, just $10,000 more than in 2014. Super accounts for almost two thirds (62.9%) of the total, while other investments (37.1%) make up the remainder. Average debt decreased (-10%) to $18,000 in 2016.

This means intending retirees will still rely on some government benefits, despite changes to the rules.

The overwhelming majority (85%) of intending retirees either own or are paying off their home. The average value of these properties equates to $495,000 per person.

This potential source of retirement funding has grown at a significant rate (43%) over the last eight years, nearly double the rate of other investments (23%).

A research report released last month suggests average insurance premiums through superannuation are too high for some Aussie workers, slashing hundreds of thousands of dollars off retirement balances.

If you're looking to switch funds, consolidate your super, better manage your self-employed savings or take out income protection for your nest egg, it's best to compare options and make the right decision.

Picture: Shutterstock

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