Should the federal government be telling retirees how to invest their super and spend their savings? Its Retirement Income Review noted with concern that retirees are being too parsimonious with their savings and leaving bequests to their kids.
The government wants to ensure super’s generous tax concessions aren’t being used for estate planning, but rather for their intended purpose: providing income in retirement.
As the super system matures and shifts its focus from the accumulation phase to pension phase, the spotlight has focused sharply on which types of products serve retirees best and whether longevity products should play a greater role.
The idea is to put a stop to “leakage” in the $3 trillion systems, with some players calling for super fund members to default into lifetime annuity-type products.
But the research was undertaken by the Association of Superannuation Funds of Australia (ASFA), using data from the tax office, the Australian Prudential Regulation Authority and other sources, found the vast majority of retirees exhaust their savings and leave no super behind when they die.
“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,” says ASFA chief executive Martin Fahy.
The research showed 90% of retirees aged over 80 had no super in their final years. Among women, 85% who passed away aged 60 and over had nothing left.
“The main challenge for the system is to deliver higher superannuation balances at retirement. The solution for ensuring the adequacy of retirement incomes is moving the superannuation guarantee to 12%,” says Fahy.
Denne historien er fra June 2021-utgaven av Money Magazine Australia.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra June 2021-utgaven av Money Magazine Australia.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.
