Australians will have to save more than $2million in order to retire comfortable, research shows.
A couple of million in the bank would allow retirees to live off $80,000 a year – but is the daunting figure attainable?
Yes, according to finance expert Vanessa Stoykov.
Despite a Griffith University study’s finding that more than 80 per cent of generation X and Y Australians will fall short of the retirement goal, Ms Stoykov said changing a few financial habits and consolidating debt would allow people to reach the $2million figure.
Australians will have to save more than $2million to be able to comfortably live off $80,000 a year when they reach retirement age, research shows (stock image)
Finance expert Vanessa Stoykov (pictured) said changing a few financial habits and consolidating debt would allow people to reach the daunting figure
Ms Stoykov, author of ‘The Breakfast Club for 40-somthings’, told Sunrise on Tuesday people need to change their view on retirement and stop thinking of it as a chore.
By doing so, as well as consolidating credit card debt to one low interest loan and stopping bad spending habits, Australians will be able to live comfortably after they stop working.
Association of Superannuation Funds of Australia said a balance of $1 million (in current dollars) at retirement age was well in excess of its ‘comfortable standard’ of retirement benchmark.
Saving a little more than $20 a day from the age of 18 could net a person the magic million dollar retirement fund. More than $40 a day could push them closer to the $2million mark.
A person saving $36 per day from age 30 would net $1,000,535 by retirement.
Starting at age 40, a saver would reach $1,000,839 by the age of 65 if they put away $64 per day at the same interest rate.
To reach the $2million goal, 40-year-old’s and up would need to stock away more than $120 a day.
A Griffith University study’s finding that more than 80 per cent of generation X and Y Australians will fall short of the retirement goal
Saving a little more than $20 a day from the age of 18 could net a person a $1million retirement fund
Graham Cooke, insights manager for comparison website Finder.com.au, previously told Daily Mail Australia ‘a little goes a long way when it comes to saving’.
‘Our research reveals that saving less than the price of lunch everyday would make you a millionaire by retirement.
‘With many savings accounts barely offering north of 2 per cent, it’s easy to assume our low-interest world will be here forever.
‘However, with 80 per cent of economists surveyed by finder.com.au tipping a rise as the next cash rate move, these rates are set to rise.
‘Presuming a long term average interest rate of 4 per cent, parents could set up a nest egg for their kids by setting up a savings account.
‘Investing only $9 per day in a savings account at 4 per cent adds up to a healthy $1,018,814 by the age of 65.’
Saving more than $40 a day could push people closer to the $2million mark