Australia’s Retirees Struggle to Collect Enough Savings

personal loansThe next decade and a half will see 5.3 million Australian baby boomers shift into retirement but questions are being asked about their ability to afford it. New data suggests that they might not be. The figures tell us that one in seven baby boomers is of the opinion that their finances are sufficient for retirement. Furthermore, 35% say they are not prepared and 51% say that they are only slightly prepared.

Retirees are recommended to amass $41,090 for single person retirement and $56,236 for couples to be able to afford a comfortable lifestyle. The results also showed that 70% of baby boomers did not get financial advice when they made their retirement plans.

Industry experts say there is a low level of understanding about the costs of funding for retirement among baby boomers. Nearly 50% do not think that financial restrictions will force them to give anything up for retirement. The baby boom period is a reference to the increase in the number of births after World War II, specifically the years 1946 to 1965. In 2011 baby boomers would have been between 46 and 65 years of age. Baby boomers make up the majority of the population and are also responsible for a lot of consumption by the public. Their patterns and preferences, when it comes to consumption, define to a great extent, the ebbs and flows of the local economy. The older citizens’ consumer group has significant purchasing power for market development and innovation.

Even though the Reserve Bank’s rate cuts gave eased some mortgage stress down under there are still plenty of postal codes on the black list for repayments. According to the results of a national survey, mortgage delinquencies decreased to 1.2% for September from 1.6% at the end of Mach last year. Queensland was the worst performer with a delinquency rate of 1.41%. It was also the worst performance for borrowers, who were 30 or more days behind on their home loan repayments. This was still a vast improvement from it status at the end of March, which found itself at 1.86%. The majority of worst performing areas happened to be in Queensland. Tourism centres were at the top of the blacklisted areas list, after Gold Coast east.

At a time where applications for credit cards and personal loans are also low Victoria residents still have the best payment track record in the country. Of the 10 best performing regions five were located in Melbourne, the same result as March 2012. The survey revealed that areas lying to the southwest of Sydney, the west of Melbourne and in the south of Brisbane had seen the greatest benefit from the rate cuts. Also, research released by the Bankwest personal loans team indicates that online loans can still supply potential clients affordable rates.

Ipswich in Queensland and Fairfield-Liverpool showed the biggest decreases in terms of those who were 30 days and more in arrears and the lowest levels of mortgage delinquency, since March 2012. The report also showed that Nelson Bay in New South Wales was the worst performing postal cost, for the value of home loans being in arrears since the report was first put together in 2007.

The rate cuts passed in October and December 2012 are expected to take effect on the local mortgage performance in the first quarter of December and offset against spend during the festive season. A three to four month lag in the performance of the home loan market has not really shown signs of improvement after the latest string of rate cuts. Places like New South Wales, where serviceability is the solution to mortgage performance issues, are expected to yield the greatest return on the cuts that were passed Last October and December.

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