The amount that Australians think they need in superannuation for a comfortable retirement has jumped by nearly 20 per cent in two years – but most people tend to overestimate how much they actually need to save.
After restrictions imposed during COVID-19 lockdowns, people emerged with a greater interest in retirement planning and higher expectations for their nest egg. Australians expect to have 19 per cent more in their super balances when they retire, or $940,509, up from $791,796 in 2022, according to an Australian Retirement Trust survey.
Anne Fuchs says the increased expectations for retirement savings can be attributed to the return of normalcy post COVID-19.
ART advocacy and impact executive general manager Anne Fuchs said people’s expectations about their future lifestyles changed after COVID-19.
“People get to a point where their kids are done with school so you have more capacity to think about, ’10 years from now, what would I like? Would I like to stop work? And what would be that number [superannuation targets] be if I did want to stop work?’.”
Fuchs described it as a “common phenomenon”, where more people want to retire earlier to enjoy retiree life.
“More people want to retire earlier and dial back their hours at 60 to do all these big trips, holidays, or dreams that they might have… I think COVID-19 helped us realise what’s important, and so there seems to be a strong desire to go out and live life.”
Australians think they’ll need 20 per cent more in their super to retire comfortably.Credit: Oscar Colman
Similarly, inflation and cost of living pressures have driven retirees’ superannuation savings targets up by 10 to 15 per cent compared to last year, according to estimates from Super Consumers Australia.
However, those with their super in a typical balanced fund would have seen balances grow by 13 per cent in the same period, largely offsetting the inflated targets. Retirees can also expect to have lower than expected super balances due to the government age pension, which almost two-thirds of Australians 65 years and over receive.
