A fifth of those with a household income of $200,000 are living pay-cheque to pay-cheque and having $1 million does not make you rich.
Those were two of the many striking perceptions to come out of a new survey from MLC aimed at providing advisers and wealth managers with a better understanding of how Australians identify themselves and discover their aspirations - in order to have a well-informed national conversation about our super system.
Almost half of survey respondents (46%) said they were living pay-cheque to pay-cheque. Roughly the same proportion (48%) said 'Living comfortably' requires an income of at least $150,000 annually.
The survey revealed a number of misconceptions Australians have about their own and other people's wealth. Two-thirds of people (66%) labelled their class as either middle or lower middle while in reality only 20% fit into this category.
When asked to describe the lifestyle of a typical middle class Australian, many said that the pre-requisites are having a professional job, owning a house and car and being able to send their children to private school. With the average household income of the middle class sitting at $77,676 per annum, the research suggests there is a clear disconnect between the definition of 'lifestyle' and 'standard of living.'
Commenting on the research, NAB Wealth group executive and MLC chief executive, Andrew Hagger, said: "It's clear that Australians' perceptions of what the 'middle class' is has changed dramatically from 20 or 30 years ago.
"But, while we have changed our spending patterns, have we also changed our savings patterns? Is the current super system helping Australians achieve the standard of living they aspire to in retirement?
"This research also tells us that many Australians are looking to government for the answers, with nearly half of those surveyed believing the government should do more to help middle class families.
"Whether it be the Hawke/Keating super reforms of the 80s and 90s, or the 2006 Howard-era Future Fund, both sides of politics have made substantial contributions to help to 'save retirement'. Yet we know people contribute less when government tinkers or even discusses tinkering with the system. Super is a long term product that needs stable policy.
"The stakes are high. When we get super right, it helps Australians in retirement and helps our economy. When we get it wrong, we risk our future prosperity. We do believe a key priority should be to establish a clear objective for our super system - one that all future reforms can be focussed on supporting.
"Any reform must maximise the retirement outcomes of Australians in the future - across generations," said Hagger.