Push to delay retirement

By Christine St Anne
Thu 17 Jun 2010

Most people expect to fund their own retirement rather than relying on the age pension.

People expect to fund their own retirement as opposed to relying on the government age pension, according to a study from the Melbourne Institute.

The study was part of the latest Household Income and Labour Dynamics in Australia survey.

The study revealed that 83 per cent of men and 73 per cent of women over age 45 expect their retirement to be privately funded.
"The lower proportion of women who expect the main funding source to be private probably reflects lower superannuation balances of women," the report said.

The report's comment is consistent with the finding that only 55 per cent of single women expect to privately fund their retirement.
Although wealthier people expect to rely on their own retirement savings, over half of people in the bottom income quintile still did not expect the government pension to be the main funding source.

Despite people's intentions to rely on their own income during their retirement, the study found that many people still did not have enough savings for their retirement.

The study found that savings would last only five years for a 55-59 male who had a life expectancy of 17 years.

For single women, the median projected savings supported only two years of the expected 21 years to be spent in retirement.

The study's author Associate Professor Roger Wilkins said that there is merit in increasing the superannuation guarantee to 12 per cent, however, many people will have to delay their retirement plans.

"Our analysis suggests that the most effective way to bridge the gap between likely future retirement income and desired minimum retirement income is for people to retire later," he said.

"Later retirement both increases savings at retirement and reduces the number of years spent in retirement."