40% of Aussies forced into retirement early due to redundancy or illness

A study by retirement consulting firm Mercer has revealed 40% of Australians are forced into retirement due to redundancy or illness before they are financially ready, with many facing the risk of outliving their savings.

The research showed the problem faced by many Aussies planning for retirement is that they’re living longer but retiring earlier than expected and often outlasting their savings by more than five years on average, indicating a “significant” gap between expectations and the reality of retirement.

Mercer’s managing director David Anderson said there are uncontrollable triggers that can derail the best laid plans for retirement. “Although there are many unknowns when it comes to retirement, preparing now will help ensure unforeseen circumstances don’t throw a spanner in the works”, he said.

While the research highlighted as a nation, Aussies are becoming more “pessimistic” about prospects in the lead up to retirement, there are still plenty of ways for people to see their nest eggs grow by making the right financial moves, such as creating a realistic budget and opening a high interest savings account or term deposit.

The study also indicated if you’re a white-collar worker there’s a high chance you’ll live much longer than the average and have to fund another 35 years. “Faced with the question of how to fund 35 years with no income can be a sobering experience.  The message is take control as soon as possible”, Anderson said.

Anderson emphasised the importance of the superannuation industry, in educating consumers and providing innovative solutions to help during retirement as well as leading up to it.

“We’re beginning to see a wider range of solutions emerging as the industry shifts its focus from accumulating wealth to providing an income throughout retirement – to the very end – and this is encouraging for Australians,” he said.

Read NAB’s top tips for kick starting your super in just one week here.