Expectations for super balances declining
The amount of money Australians expect to hold in their super accounts upon retirement is falling, according to a survey, with Baby Boomers expecting to retire with only $309,077 on average.
According to the RaboDirect Financial Health Barometer, Baby Boomers in 2015 expected to retire with only $309,077, compared with 2014 when they expected their balance would be $452,310 upon retirement, and 2012 when they expected to retire with $514,798.
Expectations have also declined among Gen X and Y. The expected super balance among Gen Y has fallen 13 per cent from $514,798 in 2012 and eight per cent from $462,444 in 2012 for Gen X.
The research also revealed that respondents from the 2015 survey felt they needed less money to retire on compared with previous surveys.
“Our research shows that in 2012 Gen Y said they’d need $784,421 to retire on, but this figure fell 14 per cent in 2015. Gen X said they’d need $875,253 to retire on in 2012, but only $844,396 in 2015 – a drop of four per cent,” said RaboDirect.
The figure also dropped for Baby Boomers who said they’d need $785,769 in 2015, down 13 per cent from 2012.
The research indicated that confidence in the financial advice process is also slipping.
“In 2015, 29 per cent of respondents agreed or strongly agreed that they trusted financial advice down from 40 per cent in 2014. The average score across the five years was 31 per cent,” the survey said.
It also indicated the number of people making voluntary superannuation contributions fell between 2013 and 2015, particularly among Gen X and the Baby Boomer groups.
“In 2014, 33 per cent of Gen X and 27 per cent of Baby Boomers had made voluntary contributions: in 2015 these figures fell to 24 per cent and 21 per cent respectively,” said the survey.