Retirees expect to run out of money in 20 years

Media Release

Retirees expect to run out of money in 20 years

15 Jan, 2020

Two-thirds of retirees who have been retired five years expect to spend their savings over the next 20 years.

The latest research from National Seniors Australia, surveyed levels and causes of worry among Australian retirees. The survey found that most older Australians (53%) are worried about outliving their savings, with women (59%) more worried than men (47%).

People without any super reported the highest levels of worry, with 23% worrying frequently. Many of these people are likely to be on the full age pension, with one in three frequently worried about outliving their savings.

National Seniors CEO, Professor John McCallum, said these findings illustrate the extent of the worry felt by older Australians when it comes to their financial security.

"Australia has one of the best pension systems in the world, yet Australian retirees are still showing high levels of worry that they will outlive their savings," Professor McCallum said.

"This shows a need for better advice and education to help older Australians manage their savings so they can have the confidence to spend their money and enjoy retirement."

Why are women more worried than men?

Not only are retired women more worried than men, they are also more likely to be relying on the age pension as their main source of income. Women are also more likely to have less than $500,000 in retirement savings, which is below the ASFA comfortable standards. Divorced women are among the most worried about their financial situation in retirement.

Challenger’s Chairman of Retirement Income, Jeremy Cooper said disparities in earnings and working patterns have disadvantaged women and their potential to accumulate wealth over their lifetimes. 

"Super not only provides a reliable source of income, but also reduces worry for older Australians. On average, women live three years longer than men, but our super system doesn’t cater for this difference in longevity."

"What this and other National Seniors research clearly highlights is that people treat the age pension and their own savings differently. They fear running out of their own money, even though the safety net of the age pension will be there for them. This sends a strong signal that people worry about being solely reliant on the age pension. It’s therefore important that super funds explore ways of providing more lifetime income to their members."

The research also found that having a reliable source income that will last for life is a key factor for worrying less, with those people with a defined benefit pension or a lifetime annuity reporting the lowest levels of worry. This is consistent with previous NSA research that found 84% of retirees said that regular and constant income in retirement was very important to them.

About the Report

The latest National Seniors Australia report Retirement Income Worry. Who worries and why? is one of the largest comprehensive surveys of older Australians. The study surveyed 3584 Australians aged over 50 on their behaviour and views across a range of topics including lifestyle, health and wellbeing. The research is a joint partnership between National Seniors Australia, a peak body for older Australians, and Challenger Limited.

About National Seniors Australia

National Seniors Australia is a leading independent advocacy group for people aged over 50. It is a community of over 200,000 members, customers, supporters and followers across the country that represents the views of older Australians to all levels of government to ensure a fair go on issues of age discrimination, mature-age employment, retirement income, health care, aged care and the cost of living.

About Challenger

Challenger Limited (Challenger) is an investment management firm focusing on providing customers with financial security for retirement. 

Challenger operates two core investment businesses, a fiduciary Funds Management division and an APRA-regulated Life division. Challenger Life Company Limited (Challenger Life) is Australia's largest provider of annuities.

For more information contact:

Jane Keeley
Challenger Limited
Tel (02) 9994 7195
Mob 0402 663 522 

Craig Sullivan
National Seniors Australia
Mob 0488 047 380

Professor John McCallum
National Seniors Australia
Mob 0434 666 379