(Australian Associated Press)
Most Australians fear they won’t have enough money to retire, but they are forgetting their biggest asset.
According to the latest MLC Quarterly Australian Wealth Behaviour Survey, most believe they will need about $818,000 in savings and investments to retire.
But they only expect to retire with $557,000 behind them.
MLC said many Australians fail to factor in their family home as an asset, which is worth about $442,000 on average, and that causes unnecessary financial stress and concern.
“If we include home equity in our savings, most of us will have more than enough at retirement … and be well on the way to meeting our financial net worth wealth goals,” the MLC report said.
Despite many Australians fearing a retirement savings shortfall, just 11 per cent of respondents to the survey said they planned to sell the home to fund retirement, and only seven per cent said they would use equity in their homes.
For the first time the MLC survey also asked respondents to define ‘net wealth’, which they said was being debt free, having enough money for emergencies, being able to fund desired lifestyles, doing what they chose to do and being able to help out family and friends.
The main reason given for not meeting those goals was not earning enough money, and a surprise second reason was self-doubt.
National Australia Bank’s corporate super general manager Lara Bourguignon said if people doubt their ability with money, it makes sense that they believe they will not meet their goals.
A key reason for doubt was the lack of a financial plan reported by three quarters of respondents, she said.
“With so few people having a financial plan, we perhaps shouldn’t be surprised that Australians doubt themselves and don’t believe they have done enough to reach their wealth goals,” Ms Bourguignon said.
“Having a financial plan is crucial to feeling empowered and getting where you want to go with your money.”