The Mercer report – a survey of 1,500 people aged 50 to 80 who were not receiving a full aged pension – found only one third of Australians retired because they had enough savings.

A further 40% said they were forced into retirement early due to illness or redundancy, leaving them ill-equipped to handle life after work.

The report found most Australians think they will semi-retire before leaving the workforce completely, but in reality only one in four will have that option.

“We’re living longer but retiring earlier than we expect, which means more years to fund in retirement and less working years to save for it,” Mercer Pacific managing director David Anderson said.

“This disconnect could leave a gaping hole in our hip pockets in our golden years – it just doesn’t add up.”

Mercer also found that only 28% of workers over 50 believe they have sufficient  savings to retire when they choose.

The report comes in tandem with another Mercer report released this month, which found Australia’s superannuation system is second best in the world.

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