KEY POINTS:
Most Australian workers can look forward to a reasonably comfortable retirement, but 3.5 million people are still not saving enough to live off in their old age, a report released yesterday shows.
Superannuation giant AMP and independent forecaster Access Economics found in their report that people were better prepared for old age than previously thought, with seven million or 67 per cent of workers on track for an adequate retirement.
The inaugural AMP Superannuation Adequacy Index defines an adequate retirement as 65 per cent of a worker's pre-retirement income.
However, the report found that 33 per cent of workers are falling behind if they want an adequate retirement, even when taking into account the age pension and other assets.
Almost two million of these are under the age of 40.
"If Australia's super system is to meet the challenge of an ageing population, young workers will need to carefully plan for their retirement and look closely at what they are voluntarily contributing to their superannuation," AMP Financial Services director of corporate superannuation Greg Healy says.
"However, the fact that 67 per cent of workers are on track is good news. And initiatives like the federal government's 'Simpler Super' reforms should bolster this figure by encouraging more Australians to voluntarily save more into super."
The adequacy index - based on data from 320,000 AMP corporate accounts - found that on average workers will eventually retire with total superannuation and other assets of A$535,036 ($593,035) excluding the value of the family home.
This will provide an annual average retirement income of A$40,567 in today's dollars from a combination of superannuation, other investments and the aged pension.
However, Access Director Chris Richardson says high income earners face the greatest relative retirement shortfall, with lower income retirees able to rely to a greater degree on the aged pension.
"It is the middle income earners and high-end who have the cappuccino lifestyle now that are missing the target to maintain that lifestyle in their retirement," he said.
Australia's superannuation pool was estimated to have broken through A$1 trillion late last year.
The report found that Tasmanians have the highest current average super account balances at A$47,203, followed by NSW with A$40,548.
South Australia came next with A$37,571, then Victoria with A$37,301, ACT with A$31,874 and Western Australia with A$30,040.
Bringing up the rear is Queensland with A$28,580 and the Northern Territory with A$25,535.
- AAP
