Over 400,000 Australians to delay retirement due to property market and share slump
The number of people intending to retire in the next 12 months is estimated at 426,000, a 30% increase on the level seen in 2008 when it was 328,000, according to Roy Morgan Research.
Men currently represent 220,000 intending retirees and women 206,000, the research found.
Norman Morris, industry communications director at Roy Morgan, said additional pressures currently on retirement decisions are the declining real estate and stock market values which have the potential to delay retirement and encourage people to keep their jobs longer.
Morris suggests there will be more pressure on government funding with increasing financial pressures.
“The average level of savings and superannuation for those intending to retire in the next 12 months is well below what is required to be able to lead what the Association of Superannuation Funds of Australia (ASFA) describes as a comfortable lifestyle," Morris said.
"This will put more pressure on government funding for some time yet unless there are changes to eligibility rules, taxation or superannuation regulations.
ASFA estimates that an individual would need $545k and a couple $640k for a ‘comfortable lifestyle’.
Currently the average gross wealth of intending retirees is $331,000, up from $237,000 (40%) since 2008.
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“Intending retirees who own or are paying off their home have a major potential source of retirement funding, and with its tax exempt status, they have a considerable advantage over renters, even if values decline," Morris added.
"To include the value of homes in retirement funding decisions is likely to take a major mind shift for many as the home is generally regarded as being sacrosanct and as such not to be involved in retirement funding.
A major problem facing the Australian government and individuals is how to fund the retirement of an ageing population.
Up to now, superannuation has been playing an increasing role in retirement funding and currently represents 69% of the gross wealth of intending retirees, up from 53% in 2008, according to Roy Morgan.
Owner occupiers have a much higher potential source of retirement funding than renters. The average value of their homes has increased by 58% over the last ten years compared to only 37% for other investments.