Index shows most Australians unprepared for retirement

The CommBank Retire Ready Index, launched yesterday, indicates the average single Australian is expected to reach only 61 per cent of the savings they need above the pension for a comfortable retirement.

This conclusion is based on the Association of Superannuation Funds of Australia (ASFA) 'comfortable standard', as of the March 2015 quarter, which requires an income of $42,569 for singles and of $58,444 for couples.

Commonwealth Bank general manager of retirement Nicolette Rubinsztein said the age pension acts as a buffer and significantly boosts retirement savings, but these results show that single Australians are still not retiring with adequate savings to achieve a comfortable retirement.

The index also showed that without the age pension, the average single Australian is expected to be only 46 per cent retirement-ready – and single females are 30 per cent less ready for retirement than men.

According to the index, after receiving the age pension, the average single female is expected to achieve personal retirement savings equivalent to 47 per cent of comfortable retirement needs above the age pension, or just $35,000 per annum.

The average single male, on the other hand, retires with savings equivalent to 78 per cent of his needs for a comfortable retirement.

Ms Rubinsztein said the gap mainly relates to the fact that women have a longer life expectancy and therefore need to hold assets for longer.

“Women can also have lower retirement savings due to career breaks during their child bearing years and lower income levels over their working lives  these factors contribute to women being worse off than men in terms of saving for their retirement,” she said.

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