|
| Media Release 16-08-2005 |
|
| Newsroom |
|
| 'Citibank Retirement Index' reveals more facts of life for retirees |
|
| 2.2 million (2 in 3) have tightened purse strings in last three months |
|
| 70% of retirees who are not confident they have enough savings to fund retirement don't do anything about it |
|
| Click here to read the full report (Adobe PDF, 1MB) |
|
| Sydney, 16 August 2005: The 'Citibank Retirement Index' has revealed further findings of its inaugural look at Australia's retirement landscape. The stark reality is that spending cut-backs are a fundamental fact of life for the majority of Australian retirees. Two out of three retirees have been forced to reduce their personal expenditure in the last three months. |
|
| Launched on 1st August and tracked every six months, the Citibank Retirement Index aims to produce a comprehensive snapshot of retirement that can act as a learning tool for future generations. |
|
| Earlier findings set alarm bells ringing for Gen X and Gen Y with around one million of the current crop of retirees (30%) not confident their retirement savings will last the distance. No wonder the need to rein in spending is so widespread with all areas of the budget affected. |
|
 |
Item |
|
% who have cut-back |
|
# of retirees affected |
 |
|
Clothing |
|
39% |
|
1,238,000 |
|
|
Entertainment |
|
32% |
|
1,014,000 |
|
|
|
Holidays |
|
30% |
|
950,000 |
|
|
Groceries (food & drink at home) |
|
30% |
|
959,000 |
|
|
|
Eating out |
|
29% |
|
934,000 |
|
|
Gas, water, electricity |
|
25% |
|
795,000 |
|
|
|
Motor vehicle/public transport |
|
22% |
|
713,000 |
|
|
Savings & investments |
|
21% |
|
676,000 |
|
|
|
Telephone/internet |
|
21% |
|
676,000 |
|
|
DIY (home maintenance) |
|
20% |
|
625,000 |
|
|
|
Health (medication & treatment) |
|
12% |
|
402,000 |
|
|
|
| Source: Citibank Retirement Index |
|
| And as with earlier findings, financial confidence is the key differentiator between retirees who can afford to maintain their lifestyle in retirement, and those who just get by in old age. When it comes to spending, those who aren't confident they have enough to live on comfortably in retirement ('reds') made much higher reductions in spending across the board compared to those who are confident in their level of retirement savings ('greens'). For example, when it comes to holidays – 47 per cent of 'reds' have cut back, compared to 23 per cent of 'greens'. Similarly, 50 per cent of 'reds' have reduced spending on groceries compared to 22 per cent of 'greens'. |
|
| Andrew de Vries Head of Investments at Citibank said: "It makes you wonder if the much hyped spending power of our older Australians is being eroded. We are talking about 950,000 retirees who have reduced their holiday budgets in the last three months, 1.2 million have spent less on clothes and another million are cutting back on entertainment. This has huge implications for their quality of life, as according to our research – many are just getting by on the bare basics, there is often no room for luxuries any more. |
|
| "We think of retirement as being a time when we are on 'permanent holiday', but from what retirees appear to be telling us about how they actually live, we may need to think again." |
|
| Where does the money go? |
|
| When asked how much they spend in an average month on a specific list of items, the results showed differences amongst men and women, the 55-64s and over 65s, and once again – the 'greens' and 'reds'. On average the 'greens' spent $13,766 per year compared to $8,864 for the 'reds'. The bulk of retirees' monthly budget goes towards essentials like groceries followed by motor vehicles/transport expenses then the utilities - gas, water and electricity, followed by medication. |
|
 |
|
| Source: Citibank Retirement Index |
|
| Andrew de Vries continued: "What this suggests is that with better planning and greater saving, the potential spending power of future retirees could be enormous and a huge boon for the economy. More importantly, future generations would be able to have the retirement lifestyle they chose rather than the one they are forced to accept. But this remains a 'what if' unless more people become financially aware and get their plans in order now, so they can be confident that they have enough money to last them 20 years or more in retirement." |
|
| Leaving a legacy |
|
| Some 79 per cent of retirees plan to leave an inheritance, and around one in ten of them are deliberately living on less income to do so. Of those not planning to leave an inheritance, the big factor is because they can't afford to. |
|
| What keeps retirees awake at night? |
|
| Our retirees are a worried lot, but the good news is that starting to save earlier for retirement appears to alleviate some of the worry. Those who started saving for retirement after the age of 50, have more financial worries (48%) compared to those who started saving before the age of 40 (29%). |
|
|
What retirees are concerned about |
|
% |
|
|
General health and wellbeing |
|
42% |
|
|
Relying on the govt for a pension |
|
39% |
|
|
|
Financial worries |
|
37% |
|
|
Physical signs of ageing |
|
34% |
|
|
|
Being the victim of crime |
|
24% |
|
|
Loneliness |
|
21% |
|
|
|
Financial security for children/grandchildren |
|
16% |
|
|
Age discrimination |
|
12% |
|
|
|
Being unable to pay off the house |
|
2% |
|
|
|
| Mr de Vries concluded: "There's a snowball effect going on – a lack of financial understanding leads to a lack of planning, lower financial confidence leading to money worries and stress. According to our research, there is a very real connection between financial insecurity and ultimately, health problems. Are our retirees risking their health by not getting their finances in order? |
|
| "The bottom line is that financial literacy and financial confidence go a long way towards a happy, healthy and comfortable retirement – surely that's what we're all aiming for and with some foresight, planning and action, we can all get there. Citibank can help people looking to build a retirement nest egg through its wealth management service called CitiGold." |
|
| Further information on CitiGold is available at www.citibank.com.au or by phoning 1800 168 168. To enquire about Citibank's free Wealth Creation seminars phone (02) 8225 3290. |
|
|
|
| Media enquiries: |
|
| Leila Dean: T: (02) 8225 1658, M: 0404 509 894, leila.dean@citigroup.com |
|
| Anita Fu: T: (02) 8225 1631, M: 0401 862 986, anita1.fu@citigroup.com |
|
| Notes to editors: |
|
| 1. Research conducted by Newspoll amongst a representative sample of 325 "self-described" semi and fully retired Australian adults 55 years of age or older between 3 - 5 May 2005. |
|
| 2. Population figures are based on projected 2005 ABS data: |
|
| 55 - 64 years |
2,180,052 |
|
| 65 years and older |
2,656,341 |
|
| Total 55+ |
4,836,393 |
|
|
| The Citibank Retirement Index focuses in on the 3.2 million Australians aged 55+ who are fully or semi retired. |
|
| 3. About CitiGold |
|
| CitiGold is Citibank's wealth management service aimed at affluent customers who hold balances of A$100,000 (or equivalent) with Citibank. CitiGold Centres provide customers with a range of superior products designed to maximise wealth creation. |
|
| Customers are serviced by personal CitiGold Financial Consultants who have the complete investment planning resources of Citigroup, the world's largest financial institution, behind them. Financial Consultants provide customised advice and expertise, gathering and co-ordinating advice locally and from across the globe. |
|
| Services include local currency investments, foreign currency products including dual currency deposit, structured products, managed funds, superannuation, retirement income products, personal insurance, mortgages, credit cards and more. |
|
| Miscellaneous findings |
|
| Almost 1 in 2 (46%) don't spend anything on holidays each month |
|
| 1 in 2 (51%) don't put anything towards S&I per month |
|
| Around 1 in 3 don't spend any money on eating out, entertainment or DIY each month |
|
| University educated put $101 per month into S&I compared with primary/secondary educated ($42) and college/apprenticeship ($54) |
|
| Biggest retirement worry for women is having to rely on the govt for a pension (44%) compared to 33% of men |
|
| Biggest retirement worries for 55-64 year olds are financial worries (49%) and health & well-being (47%) |
|
| Biggest retirement worry for 65+ is relying on the govt for a pension (43%) |
|
| Biggest retirement worry for semi retired are financial worries (50%) and health & well-being (49%) |
|
| Biggest worry for fully retired is relying on the govt for a pension (42%) |
|
| Biggest worry for 'greens' is general health and wellbeing (39%) |
|
| Biggest worry for 'reds' is financial worries (74%) |
|
| Almost 1 in 5 (17%) of 55-64 are worried about ageism compared to 9% of 65+ |
|
| 1 in 4 (25%) fully retired are worried about being the victim of crime |
|
| Blue collar workers twice as likely to worry about financial future for children/grandchildren |
|
| Low income households (less than $30k) most worried about govt pension |
|
| Citigroup (NYSE: C), the leading global financial services company has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex. Additional information may be found at www.citigroup.com |
