Not having to worry about paying a mortgage or rent is among the top things that Australians across all generations believe are key to living a comfortable retirement, according to a new study.
A new cross-generational study by ING, involving more than 2,000 participants aged between 16 and 64, found that not having the stress of paying a home loan or rent is one of the top two things that Australians across all generations believe will make for a happy retirement.
Respondents across all age groups also indicated that having “enough money to live comfortably” would make them happy. According to ING’s study, “enough” would be between $1.5 million and $1.74 million each in savings (excluding assets), which is reportedly more than double the Australian Financial Security Authority’s recommendation for a standard couple that own their home.
Being able to take regular holidays and eating out at any time also ranked highly among the things that Australians believe would allow them to enjoy their retirement.
Further, more than 45 per cent of all respondents said being able to work casually when it suits them would make them happy, particularly Gen Z respondents, with 60 per cent of this group expressing this preference.
“For Aussies, it’s the simple things that will make us happy in retirement — having enough money to live well and home security. We’re also a nation that’s not prepared to completely stop work, with many choosing to continue some sort of casual work throughout retirement,” ING said.
However, Gen X respondents believe they will not be financially ready to retire until the age of 72, despite wishing to retire almost a decade earlier, at 63.
Gen Y respondents, on the other hand, expressed their preference for retiring at the age of 61, but don’t believe they’ll have sufficient funds to do so until they’re 68, while Gen Zers said they would like to retire at 62 years of age, but think it would not be feasible until they’re 65.
Meanwhile, more than 41 per cent of Baby Boomer respondents said they plan on spending their children’s inheritance, compared to 28 per cent of Gen X, 31 per cent of Gen Y and 14 per cent of Gen Z.
“Baby Boomers that say they will leave an inheritance for their children might want to also leave some financial guidance as 76 per cent of Gens X, Y and Z say they don’t feel confident about managing an inheritance,” ING said.
Additionally, the non-major lender’s study discovered that more than a third, or 35 per cent, of Gen X, Y and Z respondents that expressed concerns about having insufficient savings for retirement don’t know where to begin to address them, while 25 per cent are choosing to “stick their heads in the sand and hope for the best”.
Less than half of Gen Xers said planning for retirement is something that’s at the back of their minds, while almost two-thirds of Gen Yers, or 64 per cent, and 79 per cent of Gen Zers admitted to having retirement planning on their list of things to do.
It’s around the age of 45 that Australians start thinking seriously about planning for retirement, according to the ING study.
Speaking of the findings, Melanie Evans, ING’s head of retail banking, said: “Gens X, Y and Z are clearly thinking cautiously about retirement and are under no illusion that you can retire whenever you want without adequate savings. However, there seems to be a reluctance to make plans, and this could be because they’re just not sure where they can go for help.”
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