Only 40% of Australia’s superannuation fund members expect to have a comfortable lifestyle in retirement while half of current retirees say their lifestyle is comfortable, according to a survey commissioned by Challenger Life.
The survey of over 3,000 super fund members aged over 45 revealed that older people were more likely to expect comfort in retirement.
Aaron Minney, Challenger head of retirement income research, said the disparity could partially be explained by older people having more savings while younger savers had yet to see the fruits of compounding returns.
According to Minney, the survey also showed the typical super fund member did not think about retirement risks in the same way as superannuation professionals.
“Many members did not know what longevity risk means and importantly how it can be managed,” Minney said.
“There is this one-sided concern that they might outlive their savings rather than also thinking about solutions that can provide secure lifetime income.”
Minney said the survey showed women, people under 65 and those expecting a basic lifestyle were more likely to be concerned about outliving their retirement savings.
Data from the survey showed people with a financial plan, whether formal or otherwise, tended to have lower concerns about their retirement lifestyle.
Some four-in-10 of those with plans said they were not concerned about their savings, compared to only 17% for those without a plan.