The amount of money Australians believe they need for a comfortable retirement has jumped more than 22% in a single year, according to a new survey, as persistent inflation compounded by the shock of the Iran war deepens retirement anxiety.
Retirement Hopes at 62, Reality at 66
According to Bloomberg on Tuesday, a survey of 2,000 adults by Australian asset manager Colonial First State (CFS) found that respondents now believe they need more than 1 million Australian dollars (about 1.08 billion won) for a comfortable retirement. That figure is more than 22% higher than a year earlier, when the amount stood at around 817,000 Australian dollars.
The increase reflects mounting fears that savings could run dry the moment workers leave their jobs, as inflation drives up living costs. Respondents said they hoped to retire at an average age of 62, but expected they would need to keep working until at least 66 to cover soaring housing costs and household debt.
"The cost of living is spiraling out of control, and prices are rising," said Marisa Foo, general manager of retirement and growth at CFS. "On top of that, households are carrying greater burdens such as supporting elderly parents and children, and people are constantly checking their pension account balances and calculating just how many years they can survive on that money."
Australia's superannuation market, one of the world's largest at 4.5 trillion Australian dollars (about 4,902 trillion won), has so far failed to ease such anxieties. With 2.5 million baby boomers set to retire en masse over the next decade, the asset management industry is under pressure to design tailored portfolios for them.
Australia has been grappling with high inflation even before the Iran war. In April, the consumer price index rose 3.4%, exceeding the central bank's target range of 2% to 3%, while interest rate hikes under the tightening cycle are rapidly eroding the real purchasing power of retirement assets.
Women Face Greater Risk of Old-Age Poverty
The survey also revealed a notable gender gap in retirement anxiety. While 62% of female respondents worried they would not have enough money to maintain a stable life after retirement, only 48% of men shared the concern.
Australia's superannuation system requires employers to contribute a fixed share of workers' wages — gradually raised from 3% at its introduction to 12% today — meaning balances grow faster the longer one works and the higher one's salary. But women, who are more likely to experience career breaks due to childbirth and child-rearing and to take part-time or contract jobs upon returning to work, tend to accumulate smaller balances than men.
The median pension balance for men aged 60 to 64, the typical retirement age bracket, stands at 220,000 Australian dollars, while for women it is just 163,000 Australian dollars, leaving them more exposed to the risk of old-age poverty.
According to guidelines from the Association of Superannuation Funds of Australia (ASFA), the standard amount needed for a comfortable retirement at age 67 is 630,000 Australian dollars for a single household and 730,000 Australian dollars for a couple. Assuming a 30-year-old with seed money of 30,000 Australian dollars and a median income, that person would have about 610,000 Australian dollars by age 67 — meeting the quantitative benchmark. But narrowing the gap between that figure and what people actually feel they need is emerging as a national challenge.
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