Australians are preparing to sell their homes and spend less on their kids in order to fund their retirement years, according to a recently released survey. For those with excessive credit card debt or a significant home loan balance, this news could encourage them to rethink their finances now in order to make fewer sacrifices later in life.
Australians may be unprepared for retirement
The MLC Wealth Sentiment Survey shows that 11 percent of Australians intend to sell the family property in order to pay for retirement.
Furthermore, over half of the survey respondents said they don’t think they will have “enough or far from enough” to retire.
“Women also continue to worry more than men about retirement, with one in three saying they will have far from enough to retire,” explained National Australia Bank (NAB) wealth group executive Andrew Hagger.
There’s a trillion-dollar retirement savings gap currently at play, according to NAB, which manages the MLC brand. Coupled with Australia’s ageing population, it’s not hard to see why many Aussies are unprepared for retirement.
Australians will slash spending
While a little over one in ten individuals plan to sell their homes in order to fund their golden years, a further 42 percent are unsure what they’ll do with regards to what might be their most significant asset.
It’s not just property that’s consuming people’s thoughts — the survey showed that 23 percent of Australians intend to pull back how much they spend on their children.
In a further bid to keep their high-interest savings account firmly in the black, 30 percent of individuals across the nation think they’ll spend less money on home improvements and significant household items.
Not everything gets the cut
While some Australians are thinking about saying goodbye to the family home, spending won’t necessarily be cut across the board.
Surprisingly, while individuals hold concerns about having sufficient savings for retirement, overall concern levels dropped during the third quarter, according to the survey.
Most of the survey respondents expect their health spending will increase, as well as insurance premiums and utility bills.
And while they’re gearing up to spend less on dining out and entertainment once they hit retirement, they’re not going to cut back on everything. In fact, holiday-ready and investment savvy Australians will continue to exist: The survey found that Australians may have fewer fancy dinners but they’re less likely to cut spending when it comes to investments, superannuation, groceries and travel.
The good news is, there are still many ways Australians can boost their retirement funds. Early this year, the concessional contribution cap increased for those under 50 years to $30,000.
“The earlier you start saving, the more your superannuation will benefit from the effect of compound interest. Every dollar you put in super before you turn 35 could be worth around seven dollars in retirement,” said Association of Superannuation Funds of Australia chief executive Pauline Vamos earlier this year.