Page 13 - How Australia Retires

12 Vanguard | How Australia Retires

50%

of working-age Australians want to retire with a yearly
income significantly higher than the yearly income cur-
rently required by older generations.

When contemplating their desired With more time to work towards are less likely to own their
yearly income during retirement, their retirement goals, working- home compared to older
working-age Australians who are age Australians may be setting generations , leading to
5
yet to retire expressed that they themselves higher post-retirement expected rental expenses.
would like to have an income of income targets and setting a new • Working-age Australians’
on average $99,000 per annum retirement standard. However, expectations of retirement
(assuming today’s dollar value). there may also be an element lifestyles and the activities
Those who have already retired of working-age Australians’ they would like to differ from
said that they desire on average expectations of retirement not expectations held by older
$68,000 (in today’s dollar value) as aligning to reality. This could generations. For example,
a yearly income, significantly less be because: when asked about the
than the desired income of current lifestyle they would like to
working-age Australians. • Working-age Australians lead in retirement, working-
may not be able to effectively age Australians prioritised
Interestingly, the figures were predict what their financial travel (should financial
much lower for both working-age wants and needs will be during considerations allow).
Australians and current retirees retirement, especially due to Current retirees, however,
when asked about the minimum retirement not being in their prioritise spending time
yearly income they think they near or immediate future. on hobbies.
would need in retirement, with • Working-age Australians may
working-age Australians indicating not be able to envision their
an average of $62,000 (assuming retirement lifestyle, therefore
today’s dollar value) and current not being able to effectively
retirees stating approximately foresee how their current
$41,000 on average (assuming incomes and expenses will
today’s dollar value) per annum. translate to their retirement
While the yearly amount that income and expenses, which
current retirees perceive they need may be leading to an over-
is significantly lower than their estimation of their retirement
desired yearly income, current spending needs.
retirees still indicated they need • Working-age Australians
substantially less than working-age
Australians did, which may suggest
that retirees find they can manage
on a lower income than expected.

5. Source: Australian Bureau of Statistics, Owning a home has decreased over successive generations (media release, 20 October 2022).