Australians have raised the bar on how much they believe is required to secure a comfortable retirement, according to fresh research from Colonial First State (CFS). The study, conducted by one of the country’s largest pension and wealth managers, reports that the target has climbed to more than A$1 million - about $718,450 - marking a rise of A$183,000 over the previous 12 months.
The annual survey, which polled almost 2,000 people, attributes the upward revision primarily to inflationary pressures and growing living costs that are prompting savers to question whether their nest eggs will be sufficient once they stop working. Respondents indicated an aspiration to retire at age 62, yet on average they expect to remain in the workforce until age 66.
“The cost of living continues to increase, inflation has spiked significantly and then there’s many other factors of family and supporting others that Australians are going through,” CFS Executive Director for Retirement and Growth Marissa Powe said in an interview to Bloomberg. “People are getting more engaged with their super, they’re seeing their balances and they’re trying to figure out ‘how long will this last me?’”
The findings amplify broader concerns about post-work finances in Australia, despite the country’s sizeable pension system. The survey notes that Australia’s pension sector holds roughly A$4.5 trillion, placing it among the leading global retirement systems by size. Still, with an estimated 2.5 million Australians projected to enter retirement over the next decade, the industry faces mounting pressure to expand the choices available to individuals when they begin withdrawing from their pension savings.
Inflation dynamics are underscoring those worries. Australia’s trimmed mean measure of annual consumer-price growth - a gauge that removes the most volatile price components to show the underlying trend - accelerated to 3.4% in April. That pace sits above the Reserve Bank of Australia’s 2%-3% target band. The survey also notes the country was contending with elevated inflation even before the Iran war.
Gender differences in retirement stress emerged in the results. Around 62% of women surveyed said they are worried they will not have enough money to live comfortably in retirement, compared with 48% of men.
What the survey shows
- Retirement savings target has increased by A$183,000 to exceed A$1 million.
- Average aspirational retirement age is 62, but expected retirement age is 66.
- Trimmed mean inflation rose to 3.4% in April, above the central bank’s 2%-3% band.