A check on your super balance will most likely see it has fallen since the start of the year – and yet the cost of a weekly shop has risen, and the price of your favourite restaurant meal makes it unpalatable.
New research by independent retirement funding provider Household Capital, in conjunction with Your Life Choices, reveals that many seniors feel retirement is not meeting expectations due to the increased cost of living – is it any wonder, with the consumer price inflation climbing at its fastest rate in decades and the stock market falling more than 15 per cent in the past six months?
The research, which included over 3,500 seniors, revealed that 48 percent felt negatively about their retirement experience, with almost half of respondents admitting that this next stage of life does not live up to expectations.
The study also found that 34 percent were “not at all confident” they could avoid outliving their retirement savings, highlighting a pressing need for greater financial stability and regular income to help alleviate these stressors.
“Neither the pension nor superannuation returns are keeping up with inflation, meaning retirees are going backwards and struggling to keep up with the cost of living,” said Dr Joshua Funder, CEO of Household Capital.
“Over 75 per cent of retirees are homeowners. What many Australians don’t realise is that they can use the value or ‘equity’ built up in their home to both guarantee their retirement housing and to improve their retirement lifestyle, lessening their financial stress and making the most of their retirement.”
Meanwhile, new research by AMP has found concerns about retirement have escalated, with three in five Australians worried they won’t have enough to retire, up from two in five in 2020.
AMP’s general manager retirement solutions, Ben Hillier, said about one in three people would be willing to downgrade their lifestyle expectations, while 61 per cent of people would be prepared to work longer.
“But this might not be necessary. Many of us underspend in retirement, passing away with as much as 90 per cent of our super savings untouched, according to Treasury’s Retirement Income Review,” Ben said.
The Federal Government allows retirees to earn $7800 a year of income without it counting towards Centrelink’s pension income test. It recently increased the limit to $11,800 for the 2022-23 financial year.
