Australia is not only the land of unaffordable housing, it is also a very expensive place to retire on a global scale.
Brisbane, Sydney, Perth and Melbourne occupy four of the ten worst places to grow old during a cost of living crisis – even for those living modestly without the regular overseas holidays and cruises.
The study by British insurer Shepherds Friendly places these Australian capitals in the same category as Zurich, London and Singapore.
Australia is not only the land of unaffordable housing, it’s also a very expensive place to retire (stock image)
Brisbane is in third place – behind Zurich in Switzerland and the Icelandic capital Reykjavik – with $386,000 needed to retire, based on the Australian dollar (pictured, the Story Bridge).
Brisbane comes third – behind Zurich in Switzerland and Reykjavik, the Icelandic capital – with $386,000 needed for an individual to retire, in Australian dollars.
Sydney was in fourth place with $383,179 required.
Perth was in eighth place with $369,048 required for retirement, while Melbourne was in 10th place with $365,424 required.
Shepherds Friendly’s retirement recommendations were based on life expectancy and cost of living in 46 cities listed in the World Happiness Report.
The amounts needed were considered high by global standards, although they were well below the Superannuation Funds Association of Australia’s level of $595,000 for a comfortable retirement.
They were closer to the $258,000 level recommended by Super Consumer Australia for a modest retirement, where someone vacations in Australia rather than heading overseas every year or two.
Men aged 60 to 64 had a median super balance of $211,996 in 2020-21, compared with $158,806 for women, according to Tax Office figures.
Both levels are below the levels recommended by Shepherds Friendly.
In September, retirement savings declined for the second month in a row, with a SuperRatings report showing a 1.8 percent decline last month for balanced funds with a 60 to 76 percent tilt toward growth assets.
SuperRatings Executive Director Kirby Rappell said the conflict between Israel and Hamas risks creating more uncertainty over pension balances in the coming months, as high inflation fuels concerns about a further hike potential of the Reserve Bank’s interest rates.
“The trajectory of interest rates and geopolitical tensions are likely to remain the main drivers of pension returns over the coming months,” he said.
Westpac’s new chief economist Luci Ellis, a former deputy governor of the Reserve Bank, said a further rate hike was a possibility if inflation in the September quarter did not show signs of moderating.
“A surprise could result in a revision to their forecast in November and – if significant enough – be taken into consideration at the November board meeting,” she said.
A further rate hike – taking the RBA’s policy rate to 4.35 per cent, its highest level in 12 years – would be good for bank savings but bad for pension balances, as stock market returns would be weaker.
Sydney was in fourth place with $383,179 required (pictured, The Rocks under the Harbor Bridge)
Perth was in eighth place with $369,048 needed for retirement (pictured, the Swan River at night)
While Melbourne was in 10th place with $365,424 recommended (pictured Flinders Street Station)
The Australian Prudential Regulation Authority released its Superannuation Fund Proposal this week to provide more detail on how retirement savings are invested.
“Under these proposals, members would have a clearer and more detailed picture of how their money is spent and invested, while trustees would additionally be required to remain narrowly focused on improving member outcomes,” said APRA Vice President Margaret Cole.
Australians born from 1957 onwards are entitled to an age pension at age 67, and the mandatory employer superannuation is 11 per cent since July 1.
Australian retirees often move from large, expensive Australian cities to a cheaper regional area, having sold their homes to increase their savings.
Sydney and Melbourne are among the 10 least affordable on US housing think tank Demographia’s global list comparing median house prices to median house incomes.
