SYDNEY: The recommended nest egg for retired Australian homeowners has surged in the past six months as cost-of-living pressures add to the squeeze on pension balances.<\/p>\n
Couples aged 67 and over now require A$730,000 (US$515,000) in pension savings for a comfortable retirement, according to a report released Tuesday (Feb 24) by the Association of Superannuation Funds of Australia – a A$40,000 leap from its September update. For singles, the target has climbed A$35,000 to A$630,000.<\/p>\n
The amounts, which assume retirees also receive a part government pension, have increased for the first time in three years, the report shows.<\/p>\n
“The Age Pension has not kept pace with the actual cost increases retirees face, particularly for essential goods and services,\u201d ASFA Chief Executive Officer Mary Delahunty said in a statement.<\/p>\n
“This means retirees need higher super savings to maintain a comfortable lifestyle.\u201d<\/p>\n
Australia\u2019s A$4.5 trillion superannuation system, which mandates employer contributions to workers\u2019 retirement savings, ranked seventh globally in a pension index in October, with Singapore the only Asia Pacific market ranking higher. Yet surveys repeatedly show Australians fear they won\u2019t have enough money to retire comfortably.<\/p>\n
Listen and follow The Bloomberg Australia Podcast on Apple, Spotify, YouTube or wherever you get your podcasts.<\/p>\n
Retirees\u2019 cost-of-living pressures persist as the Reserve Bank of Australia became the first monetary authority to hike interest rates this year, citing stubborn inflation and a still-tight labor market. Traders are expecting another increase in the coming months after last week\u2019s job data showed stronger than expected numbers.<\/p>\n
Still, ASFA said that superannuation balances are helping to offset inflationary pressures, thanks to cumulative growth of 35% over the past three years amid strong equity markets.<\/p>\n
“The good news is that Australians are reaching retirement with larger super balances than ever before,\u201d Delahunty said. – Bloomberg<\/p>\n
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