Natixis Investment Managers has discovered that Australians are retiring later than other countries across the globe at 65, compared to the global median age of 61.
The firm’s Global Retirement Index (GRI) has also seen Australia’s ranking fall by two spots from fifth last year to seventh, despite a higher overall score of 78 per cent compared to 75 per cent in 2022.
The GRI rankings, created in collaboration with CoreData Research, take into account four sub-indices to evaluate retirement environments across the globe: finances in retirement, material wellbeing, health and quality of life.
This is the nation’s ninth consecutive year in the top 10 for retirement security, driven by its high ranking of third in the world for finances in retirement and ninth for the health sub-indices.
The top five countries for the GRI are Norway, Switzerland, Iceland, Ireland and Luxembourg. The Netherlands ranked sixth, followed by Australia, New Zealand, Germany and Denmark.
Australia’s ‘world class’ $3.4 trillion superannuation system is one of the reasons for its consistently high ranking, says Louise Watson, country head of Australia and New Zealand at Natixis IM.
However, she is concerned about the country’s high retirement age compared to other nations across the globe.
“This really shows how important it is for us to make our investments work as hard as possible while we are employed and well into retirement,” Watson observed.
To ensure an earlier retirement, she encouraged Australians to look beyond Australian equities and property. Instead, incorporating a more diversified range of strategies in their portfolios will give them a better chance of retiring when and how they want.
Australia has fallen from first place to 20th this year in the inflation category, alongside a decrease from 11th to 20th in interest rates.
In June, Natixis IM reported that over three-quarters of Australians believe inflation is a big threat to their retirement security.
Moreover, over half of Australian respondents in the Global Survey of Individual Investors said they are worried about inflation and 42 per cent are worried about interest rates.
“In the post-COVID economic environment, we’ve seen high inflation and rising interest rates place increasing financial pressure on Australian households. So, it’s no surprise that some investors are concerned about their financial security in retirement,” Watson added.
