A significant report was released by the Productivity Commission today on the utilisation of superannuation post-retirement. It shows a surprisingly large number of people (more than 70%) are drawing super down gradually in retirement rather than taking lump sums. The link to the report is given below.
However they point to the flexibility implicit in current arrangements which may still leave many people drawing down too quickly where they have overestimated the adequacy of their retirement savings.
For example, ABS data from 2012-13 showed that for people retiring between 60 and 65, 60% expected savings to be adequate before retiring but only 40% found savings to be adequate after retirement.
Nevertheless the high proportion of retirees drawing super down gradually suggest some maturity emerging in people’s decisions and the advice they receive from super funds on how to manage retirement. It suggests that the more optimal longevity risk based products like lifetime annuities or deferred annuities, may soon be on the main menu for retirees. This will require the industry to develop more effective ways to communicate the value of longevity insurance as a rate of return gain over the longer than average years lived. It will also require some sensible revision of regulation of the tax basis of lifetime annuity products.
Posted Tuesday, 7 July 2015
- Tuesday, 18 Sep 2018 - Population and Migration Data
- Sunday, 16 Sep 2018 - Oz Migration Presentation
- Sunday, 16 Sep 2018 - Public Launch of OzDemographics MOOC
- Wednesday, 5 Sep 2018 - Oz Government keeps Pension Age 67
For past news items, visit the News Archive.