Around one in four Australians (26 per cent) say COVID has impacted their plans for retirement, according to new data from leading profit-to-member superannuation fund Equip.
More than one in ten (11 per cent) say COVID-19 has stalled their plans for retirement, with those closest to retirement age being the least optimistic their working days are drawing to a close. 15 per cent of Australians aged 55 and over say they’re pushing their plans for retirement back, with almost half of these (46 per cent) by a hefty 4-5 years.
However, the study also found that 15 per cent intend to bring their retirement forward in the wake of the pandemic.
In a poll of more than 2,000 people, Equip found that when looking to the future, close to a third (30 per cent) of Australians said they do not feel they’ll be able to control when and how they begin winding down their working life (for example, going part-time).
With financial insecurity front of mind post-pandemic and against a backdrop of rising inflation, 22 per cent reported a drop in their annual income in the past two years, while a quarter (25 per cent) said they have less disposable income now than they did in 2020. This jumps to one in three (33 per cent) for those aged 55 and over.
“Purse strings have been tightened due to the rising cost of living and the fallout from COVID. It’s not surprising that this pressure is causing some retirement plans to be revised,” said Scott Cameron, CEO of Equip.
The same study also found that many Australians are overestimating the amount they need to accrue to retire. According to the Association of Superannuation Funds of Australia’s Retirement Standard, to have a ‘comfortable’ retirement, single people will need $545,000 in retirement savings, and couples will need $640,000.
Yet Equip’s study found more than a third (36 per cent) of people estimate that an individual minimum of $750,000 is required for a comfortable retired life.
“Retirement is one of the most important stages in a person’s life. We all have different ambitions for our retirement, but for most of us, it’s a time to enjoy the simple pleasures in life. Quality time with family, travel and pursuing hobbies that full time work doesn’t usually allow for.
“Many Australians are grossly misjudging how much they need in their reserve to retire, which is likely causing additional – and perhaps unnecessary stress.
“The more you financially plan for your retirement, the better off you’ll be. A financial planner can help you make sure your super is on track to deliver the best retirement possible for you and your family.
“Small steps now, such as making voluntary contributions into your super if you have disposable income, can have a huge pay off down the line,” said Mr Cameron.
