Around one in four Australians (26 per cent) say COVID has impacted their plans for retirement, according to new data from leading profit-to-member superannuation fund Equip.

More than one in ten (11 per cent) say COVID-19 has stalled their plans for retirement, with those closest to retirement age being the least optimistic their working days are drawing to a close. 15 per cent of Australians aged 55 and over say they’re pushing their plans for retirement back, with almost half of these (46 per cent) by a hefty 4-5 years.

However, the study also found that 15 per cent intend to bring their retirement forward in the wake of the pandemic.

In a poll of more than 2,000 people, Equip found that when looking to the future, close to a third (30 per cent) of Australians said they do not feel they’ll be able to control when and how they begin winding down their working life (for example, going part-time).

With financial insecurity front of mind post-pandemic and against a backdrop of rising inflation, 22 per cent reported a drop in their annual income in the past two years, while a quarter (25 per cent) said they have less disposable income now than they did in 2020. This jumps to one in three (33 per cent) for those aged 55 and over.

“Purse strings have been tightened due to the rising cost of living and the fallout from COVID. It’s not surprising that this pressure is causing some retirement plans to be revised,” said Scott Cameron, CEO of Equip.

The same study also found that many Australians are overestimating the amount they need to accrue to retire. According to the Association of Superannuation Funds of Australia’s Retirement Standard, to have a ‘comfortable’ retirement, single people will need $545,000 in retirement savings, and couples will need $640,000.

Yet Equip’s study found more than a third (36 per cent) of people estimate that an individual minimum of $750,000 is required for a comfortable retired life.

“Retirement is one of the most important stages in a person’s life. We all have different ambitions for our retirement, but for most of us, it’s a time to enjoy the simple pleasures in life. Quality time with family, travel and pursuing hobbies that full-time work doesn’t usually allow for.

“Many Australians are grossly misjudging how much they need in their reserve to retire, which is likely causing additional – and perhaps unnecessary stress.

“The more you financially plan for your retirement, the better off you’ll be. A financial planner can help you make sure your super is on track to deliver the best retirement possible for you and your family.

 “Small steps now, such as making voluntary contributions into your super if you have disposable income, can have a huge payoff down the line,” said Mr Cameron.

Retirement Case study: Wayne, 64, Strathalbyn (SA)

“My goal was to retire at 63, and thanks to my financial planner, I have”

An auto electrician in the mining industry, Wayne officially retired in March 2022.

“It’s not easy work,” says Wayne. “Some days you’re up at 4am and you don’t get home till after dinner time. As I’ve been getting older, it wasn’t viable for me to keep going. Some people have it in them, but I was ready to take a step back once I hit my early 60s.”

Wayne lives with his partner and has recently bought a plot of land in Strathalbyn, where they’re building a home together to live out their retirement. “What with me retiring, and our two sons moving away from home, we decided we were ready to make a move. We’re in a caravan for the rest of the year while it all comes together, but we’re excited to be building our dream home.”

Wayne officially retired at age 63. “I was retrenched from a role at 58, but that felt too early to consider retirement. I knew I had a few more years in me. 63 felt like the right time for me to call it a day.”

Wayne credits close collaboration and communication between his financial planner at Equip and his personal accountant in his mid-50s for making his retirement a reality.

“Our accountant was able to give our financial planner at Equip a breakdown of all our assets. Once he had visibility on what I owned, and how much was in my super, he created a bespoke retirement plan for me. It depends on what you want to do in your retired years, but for me and my family, we didn’t need a million dollars in the bank. We were able to configure everything we needed to comfortably live on, and set out a date from there.”

“One of the key things he did for me was adjust the risk in my portfolio. As I get older, I want to take less risk with my investments and my financial planner helped adjust the risk in my portfolio. I wouldn’t have known where to begin in making that decision. It’s best to rely on the experts to make that call for you.”

Wayne also credits salary sacrifice contributions he made during his working years for helping him achieve a healthy reserve on retirement. “I only started paying attention to salary sacrifice in my 50s. I immediately saw how much it helped my super balance grow – my only regret is that I didn’t do it sooner. I’m trying to get my sons, who are in their 20s, to start making salary sacrifices now.”

Wayne is confident that health permitting, he’ll be able to achieve everything he wants to in his retirement. “My account-based pension will obviously decrease as I begin to tap into it, but the projections for my managed fund look very promising.”

Alongside building their new property, Wayne has travel on his to-do list for retirement. “Me and my family have always been keen travelers. We’ve lived all across Australia throughout the years, and I’d like to go back and visit old memories and friends. I also have a son in Victoria who I’d like to visit more often.”

While he may have hung up his professional boots, Wayne is keen to keep active in his community through volunteering. “We’ve moved to a new part of the state and can’t wait to get stuck into our new neighbourhood. It’s important to me to use this downtime to give back and help others find their way.”

“We have a commitment to equip our members with knowledge and tools today to prepare them for whatever tomorrow brings, whatever stage of life they are at. Equip offers personalised advice tailored to each of our members, to ensure they get the best outcome for their super,” Mr Cameron concluded.