Over a Third of Australians Say They’ll Never Be Able to Retire

(Bloomberg) -- Some 40% of Australians say they’ll never have enough money to retire, despite the country boasting one of the world’s most envied pensions systems, according to a survey released Wednesday.

Australia’s A$3.9 trillion ($2.6 trillion) superannuation industry has been widely championed overseas as a model pensions system for other countries, recently by BlackRock chief Larry Fink. However, 40% of Australian respondents to the Natixis Investment Managers survey agreed with the statement “I accept the fact that I will never have enough money to retire.”

Australia ranked seventh in Natixis’s latest annual Global Retirement Index, which assesses 44 countries on their post-work finances, health, quality of life and material wellbeing. Switzerland took the top spot from Norway in this year’s report, which was collated in 2023. 

State pension costs in developed economies, often already the biggest single area of government expenditure, are projected to soar in the coming years. Australia’s proportion of retirees are expected to surge from 8% today to 19% over the next 40 years, according to the Natixis report. 

“Despite the country’s robust pension system, concerns persist over the adequacy of retirement preparation and Australians’ understanding of how to maximize their nest eggs,” Natixis said in the report. 

Under Australia’s superannuation system, which was created in the early 1990s, employers are currently required to make contributions equivalent to 11.5% of workers’ salaries. There’s no such requirement in the US, and the UK only recently made some minimum contributions compulsory.

Globally, 19% of respondents to the Natixis survey said they still couldn’t afford to retire even if they saved $1 million, with the report citing factors including interest rates and inflation as key concerns.

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