Dreaming about Early Retirement

retirement planning

According to a recent global survey regarding early retirement, Australians dream about this much more than other nationalities. The study revealed that 75% of people who live in Australia and over 45 years old consider retiring within the next five years. Compared to other countries, the number of citizens wishing for this is significantly higher in Australia with only Argentina and France ahead of us. However, Australians do not have high hopes regarding this, and most of the people interviewed tend to consider early retirement just another nice dream that will never come true. The scepticism of Australians when it comes to this aspect is made clear by the numbers, as two out of five people who wish to retire early also affirm that they won’t be able to do it.

Why do Australians believe early retirement is too good to be true?

The financial problems represent the main reason Aussies do not allow themselves to have high hopes. People are aware that an early retirement means saving more in order to afford comfortable living arrangements.

As the survey showed, most people currently have debts, or they need to support their family or dependents, so saving enough money for this dream is next to impossible for them.

According to ASFA Retirement Standard, a person who is 65 and single needs about $43,000 a year, which means that he/she should have around $545,000 for an early retirement. In the case of couples, the approximate amount of money needed is $645,000. These calculations have been made for people who own a home and are in good health. If these conditions are not met, you need to add more money to a safe retirement.

Another survey from 2015 revealed that 1 in 3 Australians aged over 50 has saved less than $100,000.  There is a long way until reaching more than half a million dollars for them, and the retirement age is drawing near.

Considering these aspects, it’s not hard to understand why the majority of Australians see early retirement only as a dream.

Why do people want an early retirement?

The first survey mentioned includes a question regarding the reasons Australians want an early retirement. Even though they vary a lot from participant to participant, the study could differentiate two primary reasons. First and foremost, people who want to retire early aim for freedom to travel or go with their personal interests. This was the main reason for two out of three interviewed Australians, whereas one in four dreams to retire early because of the negative impact of their work on their health.

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