Are young Australians re-defining what the path to retirement looks like?
The research has revealed that this belief contrasts with the reality of current retirees, who are content with living on considerably less.
Here are the stats:
The Vanguard report found that working Australians believe they will need an annual income of approximately $99,000 to retire comfortably.
In contrast, current retirees have shown to be content with just $68,000 (approx.) in annual income during retirement.
However, as working-age Australians progress closer to retirement phase, their idea of how much income they’ll need to live reduces greatly, in line with spending, living costs, priorities and lifestyle changes.
*According to the most recent ASFA Retirement Standard Budgets, a “comfortable” retirement for those aged 65-84 is defined as an annual income of $69,691 for couples, and $49,462 for individuals. The Standard showed annual income for a “modest” retirement is approximately 35% less for both couples and individuals.
*As at December 2022
Where income hopes increase, retirement age decreases
Along with the desire to retire on a higher income, working-age Australians have also indicated that they wish to retire younger. Research has showed that young Australians 25-34 hope to be able to retire before 60. The current age for “traditional retirement” (and access to the Age Pension) is 67.
|Current Age||Ideal Retirement Age|
|55 and older||65|
40% of young Australians have also expressed a desire to take some kind of extended career break during their 20s or 30s.
At BIS Cosgrove, we believe that this attitude operates on the idea that the retirement phase = the end of the working phase. While this is a common misconception, it couldn’t be further from the truth. In fact, many “retirees” actually choose to continue part time or volunteer work during this phase of their life to maintain purpose and fulfilment, not just for financial reasons.
Recently, we explored a series of other retirement misconceptions that many pre-retirees believe, and sought to debunk them. You can read the full article here: Retirement Debunked!: 8 Common Retirement Misconceptions
With great retirement dreams, comes greater retirement preparation
It comes as no surprise to us that the report found that people who have a higher level of confidence about their future retirement take better action to prepare for it. For most, this included seeking professional financial and retirement advice.
The research discovered that over 50% of the 1,800 Australians surveyed feel “highly confident” about their readiness for retirement.
But while more than half are feeling confident, the concern is that many Australians are not as engaged with their superannuation as they should be.
It was found that 25% of working-age Australians don’t even know what their superannuation balance is, nor what fees they are paying. Some are even unaware of who their super is with.
Wealth: A number or a mindset?
At BIS Cosgrove, we believe that the concept of wealth, especially in retirement, transcends the dollar figure in your account. Retirement ‘wealth’ encompasses happiness, health, fulfillment, purpose, interpersonal relationships, and enjoyment.
While financial stability remains important, it is only one aspect of a truly rich retirement.
Investing in your physical and mental well-being, fostering strong relationships with family and friends, embracing lifelong learning, and finding joy in the little things are essential components of a wealthy retirement. By cultivating a wealth mindset that appreciates non-monetary aspects of life, you can unlock a truly fulfilling and rewarding retirement.
Our focus is on more than just understanding your numbers, it’s about understanding your life.
That’s why we want to help young Australians re-define how they view their retirement, shifting the attitude from one that prioritises figures, to one that prioritises fulfilment. We help you establish a financial plan that focuses on achieving the lifestyle you want to live, not just how big your nest egg is.
We are your superannuation & retirement specialists
So where do you stand when it comes to retirement? Are you confident in your preparation and retirement plan? Or are you unsure what your retirement plan even looks like?
Regardless of where you’re at, a comfortable and enjoyable retirement starts with a thorough, thought out and well-rounded financial plan. And a great financial plan starts with an even better advisor.
Get in touch with us to find out how BIS Cosgrove can help you plan and prepare today, so you can live your dream retirement in the future.
Still feeling unsure or have further questions? Don’t hesitate to get in touch with us, and arrange to talk to one of our expert retirement specialists and financial advisors.
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The material and contents provided in this publication are general and informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.