Australia ranks seventh in retirement readiness

Australia ranks seventh in the world for how well individuals are prepared for retirement, according to an Aegon survey released on Wednesday.

The survey, based on the Aegon Retirement Readiness Index (ARRI), found habitual saving was the most effective strategy to ensuring a healthy retirement fund.  

While the survey noted the expectation that retirement will last longer than childhood, it said there needed to be changes in how individuals prepare and save for an extended retirement and highlighted the need for assistance form policymakers and employers.

"For most people, saving habitually is a realistic aspiration given that the average habitual saver earns approximately $41,000 per year," the report said.

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"This falls to $29,000 in the emerging economies, broadly in line with the average earnings in most countries we surveyed."

The report said if habitual saving started at an early age it could boost  their retirement incomes by $11,000 if they decided to start saving from age 20.

The Government was noted as a vital player in providing retirement benefits along with encouraging more people to take responsibility for their own retirement security.  

"Reforms to employer retirement plans and labour laws can also remove obstacles to people working longer," the report said.

"One-third of global respondents say that having access to more generous tax breaks on long-term savings and retirement products would encourage them to save more for retirement."

The survey measured attitudes and retirement aspirations among 16,000 respondents in 15 countries across Europe, the Americas, Asia, and Australia.