Retirees aren’t sitting on their super: ASFA

 

Despite some reports, the vast majority of Australians exhaust their superannuation in retirement according to data that flies in the face of the Retirement Income Review (RIR).

 

         

The vast majority of Australians exhaust their superannuation in retirement according to data that flies in the face of the Retirement Income Review (RIR).

Data from ASFA found that the proportion of the population drops sharply with increasing age, and that 80 per cent of people aged over 60 who died between 2014 and 2018 had no super in a period of up to four years before their death.

“We don’t have a systemic problem with retirees underspending or bequeathing their super – quite the opposite. The majority of Australian retirees run out of super well before the end of their lives,” said ASFA chief executive Dr Martin Fahy.

“Sadly this new data indicates that 90 per cent of Australian retirees aged over 80 had no superannuation in their final years. The situation is much worse for women. Eighty-five per cent of women who passed away, aged 60 and above, didn’t have any super left at all.”

According to ASFA, that strengthens the case for increasing the superannuation guarantee to 12 per cent – but also highlights the need for high-net-worth superannuants to withdraw any super they have in excess of $5 million. 

“The main challenge for the Australian superannuation system is to deliver higher superannuation balances at retirement. The solution for ensuring adequacy of retirement incomes is moving the Superannuation Guarantee to 12 per cent,” Mr Fahy said. 

ASFA said that the idea that retirees have more super and financial assets when they die has become a “trope” in narratives about retirement income and disagreed with the suggestion of the RIR that retirees “tend to consume only the income derived from assets and not the assets themselves”.

“Despite such claims being widely quoted, there is little or no evidence that the typical Australian dies with around the same amount of financial wealth as when they retired, other than cases where there was not much financial wealth in the first place,” ASFA said. 

“Sadly, the main group having the same amount of superannuation when they died as when they retired are those who retired with no superannuation.”

 

 

Lachlan Maddock
31 March 2021
investordaily.com.au

 

More Articles

How Our Diets have Changed.

Check out the this visualization, which tracks the evolution of dietary calorie intake from 1930 to...

Read full article

How to maximise the impact of your inheritance

Australia’s $3.5 trillion wealth transfer: how to invest an inheritance wisely   . Australia is...

Read full article

New deeming thresholds could deliver small part age pension

Two significant deeming thresholds increased on 1 July 2026, the one at which the higher deeming rate of 3.2...

Read full article

Six ways Gen X can build retirement savings

Making the most of your peak earning years . Many Gen X Australians are now in their peak earning...

Read full article

Can I still get the Age Pension if my super is healthy?

A healthy super balance doesn't always rule you out of the Age Pension . Many Australians assume...

Read full article

Contribution splitting now more valuable

The introduction of Division 296 has highlighted the value of contribution splitting and increased the...

Read full article

New to SMSFs? Start preparing for your first SAR lodgment

New SMSFs that are required to lodge a self-managed super fund annual return by 31 October should start...

Read full article

ATO’s LRBA data significantly less than industry figures

There were nearly four times as many new residential loans written using limited recourse borrowing...

Read full article

Heathmont Financial Services Pty Ltd (ABN 68 106 250 104) trading as Heathmont Financial Services is a Corporate Authorised Representative (No. 262098) of Knox Wealth Management Pty Ltd (ABN 74 630 256 227), Australian Financial Services Licence Number (AFSL) 513763.

Julian McGoldrick is an Authorised Representative (No. 262098) of Knox Wealth Management Pty Ltd AFSL 513763.

Financial Services Guide - Disclaimer & Privacy Policy

^