Following decades of economic prosperity, rising property prices and a maturing superannuation system, one would assume Australia’s growing number of retirees are fully enjoying the fruits of their working lives. Yet, that’s not the case.is a telling line ... “most retirees draw down at the legislated minimum drawdown rates ... this results in many retirees leaving a significant proportion of their balance unspent”.
New research commissioned by AMP provides fresh insight into why we are a nation of under-spenders in retirement. It shows that three in four Australians over 50 find our retirement system too complex. Seven in 10 do not know what an account-based pension is. This is particularly concerning given that it is the primary income-generating facility for most Australians in retirement. A further two in five Australians over 50 have no idea if they’ll be eligible for the age-pension.
The challenge is to evolve and simplify solutions for everyday Australians, so a finance degree is not required to understand them. While there’s still a lot more to do, encouragingly, things are starting to head in the right direction. The Retirement Income Covenant provided super trustees with a much-needed catalyst.
The ongoing challenge for industry is to evolve and simplify these solutions for everyday Australians, so a finance degree is not required to understand them.