Can’t afford a comfortable retirement

Retirement Orange

Can’t afford a comfortable retirement.

A huge 47 per cent of Australians between 26 and 64 – 6.1 million people – are not likely to have enough money, even accounting for superannuation, assets and the aged pension, to maintain a “comfortable standard of living” in retirement.

That’s according to CommBank’s ‘Retire Ready Index’, which is compiled using data from 10 million Australians’ superannuation accounts and Australian Bureau of Statistics’ data on personal wealth.

On the flip-side, 53 per cent of people in the same age bracket should have enough for a comfortable retirement, although that figure drops alarmingly to just 17 per cent if the aged pension were not available.

Although there are no signs the aged pension is under threat, there are fears about its long-term sustainability, especially after then-assistant Australian Federal treasurer Kelly O’Dwyer claimed in 2016 that the “objective behind the superannuation system” was for people to not rely on the pension.

The pricetag for a “comfortable” retirement, according to figures released last September by the Association of Superannuation Funds of Australia, is $43,372 a year for singles and $59,619 for couples.

Having enough money to budget these amounts each year from age 67 (from 2023 that will be the age at which Australians qualify for the pension) until death is what it means to be “ready” for a comfortable retirement. The calculations use average life expectancy.

ASFA said this “comfortable” standard would afford: “a broad range of leisure and recreational activities [and] a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel”.

A “modest” retirement could be attained with $23,996 a year for singles and $34,560 for couples. No further details were offered on what a ‘modest’ retirement meant, but one might guess it means choices would have to be made between holidays of any kind, a car and/or a low level of health insurance.

Overall, one in two households expect to be ready for retirement – but by far the strongest households in this sense are those run by couples. While only 27 per cent of singles are on track to be ready, 76 per cent of couples expect to be ready.

Breaking down singles’ retirement readiness by gender reveals some major concerns for women: because of lower incomes, time lost from their careers to raise children and longer life expectancies, only 22 per cent of single women are expected to be ready for retirement at 67, while the figure is 31 per cent for single men.

It’s a given that mindless spending habits including impulse spending – which happens when people are feeling anger, guilt, stress or boredom – are affecting people’s ability to save enough for retirement.

A mindful approach to all personal finance issues, especially over-spending and under-earning, is gaining momentum as a solution.

Impulse spending
Impulse spending

Employees want mental health at work taken seriously

Australian employees want mental health at work taken seriously

Employees want mental health at work taken seriously.

Australian employers don’t understand their employees’ major life concerns, according to a study of 500 workers and 300 bosses released in November 2016.

Insurance company Metlife’s  Employee Benefit Trends Study found that Australian bosses dramatically underestimated the importance of staff concerns about mental health issues. Depression, anxiety, stress and work-life balance while overestimating fears about physical health.

Financial stress played a big part in employees’ worries. A huge 41 per cent of employees admitted being distracted at work because of financial worries, while 31 per cent admitted having taken time off work to deal with “a financial issue”.

“This highlights a need for employers to step in with professional support and education to help boost their staff’s financial literacy, giving them peace of mind about their future security,” the report concluded.

The top five financial worries for staff were: job security, and not having enough money to live comfortably in retirement (both 55 per cent).

Having more time with my family, and financial security for my family if I’m not able to work (both 53 per cent); being able to cover medical expenses from a major illness (52 per cent).

Employers were asked what they believed their employees’ major health fears were and 88 per cent thought medical problems would top the list, with emotional problems identified by 69 per cent of employers.

Only six per cent of business managers nominated depression and anxiety as an issue, while 11 per cent identified stress and nine per cent believed work-life balance was a big issue.

Employee’s actual health concerns were the other way around however: 84 per cent mentioned emotional wellbeing, and 70 per cent named medical issues.

Depression, anxiety and stress were much bigger issues for employees than managers realised: 38 per cent of staff mentioned work/life balance, nearly a third (32 per cent) said depression and anxiety were major concerns and 29 per cent nominated stress.

The study conclusions included the claim employers could “win hearts and minds by encouraging emotional and financial wellness”.

Employers could “enhance employees’ ability to take control of their financial wellness by offering professional support and education”.

Metlife’s research also found employees were prepared to split the cost of customised benefits programs, including: medical or health insurance, flexible work arrangements, income protection, employee awards and incentives, and health and wellness programs.

Single Women Leading Men in US Home Ownership

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Single Women Leading Men in US Home Ownership.

The latest research into women’s struggles with money, Mary Pilon of Bloomberg notes, can make for dreary news.

“Women earn less than their male counterparts, pay harsher workplace penalties for pursuing parenthood, struggle more with debt, and save less for retirement,” Pilon wrote of the situation in the United States, although she could easily have been writing about Australia.

Crucially, women also lose years from their careers by raising children, they do mountains of unpaid (and often unappreciated) domestic work and to top it all off – when facing financial stress – often give birth to under-weight babies.

Many also still face nagging historical stereotypes that women can’t manage money – despite evidence showing women shoulder more financial decision-making and responsibility in families, marriages and relationships than ever before. Sound like a recipe for financial stress?

Forget ‘dreary’ – the news about women and money can be downright depressing.

But according to new research from the National Association of Realtors, single women in the US are leaving single men in the dust for home ownership compared to single men.

The NAR says 17 per cent of American homebuyers are single women compared to single men, who make up just 7 per cent of the market.

Pilon spoke to “30-something” Michelle Jackson who bought a one bedroom apartment in Denver in 2007 which she plans to renovate and is even considering buying a second property.

“I’m so happy,” Jackson said. “It’s completely changed how I feel connected to the place where I’m living. It’s one of the best things I’ve ever done.”

Jackson’s motivation could easily echo the story of many Australian women: “I wanted to have my own place,” she said.

“A lot of people in my circle of friends were women purchasing their homes when they got married, but I still felt like I wanted to build my own wealth and buy.

“If and when I met someone, it’s something that just added to what I bring to the relationship. It didn’t make sense to wait.”

In Australia single men still lead single women when it comes to applications for mortgage finance, according to Aussie Home Loan data reported by in 2016, but the gap is closing. Aussie Home Loans data said 12.34 of mortgage applicants were single men and 11.22 were single women.

Swinburne University social researcher Andrea Sharam said historical discrimination against Australian women in the loan approval process was shifting.

“It’s appalling to suggest women are more financially illiterate than men,” Sharam told

“I think younger women in particularly are now thinking about housing as something they do as a part of their life plan … it doesn’t matter if they get a partner or not.”