When it comes to retirement, 60s are the new 50s

Retirement age: Baby boomers to rescue millennials

ONLY 19 per cent of us will retire comfortably and Gen X Aussies will have to save up to $4 million dollars to enjoy their golden years, according to new research.

This means a whopping 81.3 per cent of Australians could fall short when it comes to being able to afford a comfortable retirement, according to the stats from Griffith University and leading financial education service, No More Practice Education.

The alarming forecasts show that if you're born after 1984, you are likely to need between $2.09 - $3.98 million dollars for a comfortable self-funded retirement in 26 years' time.

According to SuperGuide, a couple expect to enjoy a "comfortable" life in retirement today if they can generate an annual income of $59,971 by retiring with a superannuation lump sum of at least $615,000.

Leader and Founder of No More Practice Education Vanessa Stoykov said the age pension today covers only a third of what is considered a "comfortable lifestyle" in retirement.

Millenials will have to save a lot more than their parents to retire comfortably.
Millenials will have to save a lot more than their parents to retire comfortably.

"Although these numbers highlight the 'worst case' situation, preparing for this low growth scenario is essential because it's been occurring in countries like Japan for the past two decades, so there is nothing to say it won't happen to us too," Ms Stoykov said.

Luckily, an enormous $3.5 trillion dollars is expected to be passed on from Australian Baby Boomers to their children over the next 20 years, according to McCrindle Research.

From this, 75 per cent of all Gen X and Y with surviving parents will inherit $110,000, and if invested wisely, these funds could set up their future.

However, without smart investment, this would create a significant event that's being dubbed "the economic tsunami".

"The expected inheritance figure is a huge amount of money that Gen X and Y is predicted to receive, however the unfortunate truth is that Australians simply don't know how to invest it," said Ms Stoykov.

"Through decades of experience in the wealth creation space I've learnt that to truly grow long-term wealth, people need to 'unlearn' everything they think they know about money.

Those retiring now will need a superannuation lump sum of at least $615,000.
Those retiring now will need a superannuation lump sum of at least $615,000. Supplied

"I can wholeheartedly relate to why people get overwhelmed when it comes to thinking about their retirement funds. For most people retirement seems like forever, or not something they are going to be able to do.

"The good news is that reinvention is the new retirement, and it's entirely possible for Generation X and Y to achieve their goals.

"Although it's daunting, the reality is that for a comfortable retirement each person in today's terms will require $1.11 million (at 5 per cent earnings rate with no age pension), or $910,000 (at 7 per cent).

"This is no easy feat, and although it's entirely possible to achieve, it takes time, so people have to start now."

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