Only one in two Australian households are expected to have enough money for a comfortable retirement, a new report shows.
The latest CommBank Retire Ready Index released this week shows that 53 per cent of households would have enough combined super, personal assets and the Age Pension.
But when the Age Pension was removed, the number of households able to afford a comfortable retirement dropped to 17 per cent, and to a meagre six per cent when based on superannuation only.
The Commonwealth Bank commissioned actuaries Rice Warner to prepare the report, which examined data from over 10 million member super accounts of people aged between 25 and 64, as well as personal wealth data from the Australian Bureau of Statistics (ABS). The data excludes the family home.
Commonwealth Bank spokesperson Linda Elkins said that in the 60-64 year-old age group, couples were expected to be better off than singles but will have reduced readiness for retirement as they have not received the long term benefits of compulsory Superannuation Guarantee contributions.
“The report also shows that more men than women are retire ready,” Ms Elkins said.
“Women have longer life expectancies, and therefore need more assets to maintain a comfortable level of retirement.
“Women also generally have lower retirement savings due to career breaks during their child bearing years and lower average income levels throughout their working lives.”
Ms Elkins said those approaching retirement could give their savings a boost by taking advantage of the current superannuation contribution caps before they are reduced on 1 July.
“It is important that people of all ages understand how much they will need to save now to secure their financial futures.”