Findings from the second Citibank retirement index reveal that 676,000 (19%) of Australia's over 55 semi- and fully retired population have ignored advice to plan for retirement. This figure rises to 21% of retirees aged 65+ who have yet to start saving for retirement, but drops to 16% of 55-64 year olds.
This inertia could be to blame for what is becoming a bleak sign of the times for retirees. Recently Citibank’s Australian arm released findings that showed 48% of retirees are relying on the government pension for their main source of income, 39% cannot name a secondary/alternative source of income – up from 28% – and the average before tax income for this segment of the population is just A$22,000 per annum.
The study also shows that more retirees have made spending cuts, up from 68% in May 2005 to 75% in the three months to November 2005.
Citibank Australia’s Andrew de Vries says this less than rosy scenario could have looked a lot different if people had started saving earlier for retirement. Only one in four of today’s over 65s showed any savings initiative before they turned 40. Younger retirees, those aged 55-64 were more proactive, with 36% on the retirement saving bandwagon before the age of 40. The fact is, this take up is well below par and as an industry we need to address it.
At least retirees can see the error of their ways. Not starting to save earlier for retirement is their number one regret, while 40% of over 65s wish they’d started earlier. The 55 – 64 year olds are even more remorseful with almost one in two (49%) telling us the same thing. When asked how much sooner they wished they’d started saving for retirement, the results show it wasn’t a matter of a few years – but decades. Some 48% say more than 20 years and 20% say 16 – 20 years earlier.
Mr de Vries continued: You are looking at a lot of retirees with a lot of regrets. Is this what a lifetime of work boils down to? This time around we’re seeing even more people who wished they’d saved earlier and sought expert advice.