Self-funded retirees now outnumber pensioners: report

Font Size:

More than half of Australians who retire today will have enough money to be self-funded rather than reliant on the Age Pension, according to new research from Challenger.

As at December 2018, around 55 per cent of 66-year-olds could not access the pension because their income and assets were too high, with 20 per cent able to draw a part-Age Pension and just 25 per cent receiving a full Age Pension.

And, according to YourLifeChoices research, the number of retirees able to qualify for the Age Pension will decrease even further. In the 2019 Ensuring financial security in retirement survey, 65 per cent of 60 to 64-year-olds (42 per cent of whom are already retired) are fully self-funded.

The research strongly indicates that Australia’s superannuation system is working, says Challenger’s chair of retirement income, Jeremy Cooper.

“Contrary to many opinions, super is reducing reliance on the Age Pension for the large majority of people entering retirement,” he stated in the Challenger report.

“The evidence for this is that the average newly retired Australian is not accessing the Age Pension at all.”

Compulsory superannuation was introduced in 1992. With 27 years of contributions under their belts, the average consolidated balance for Australian singles aged between 60 and 64 exceeded $300,000 in 2016-17 based on Australian Taxation Office aggregates for super balances. The super balance of a typical couple starting retirement today is around $400,000 and, depending on inflation, is estimated to be $600,000 in five years’ time.

And, according to Department of Social Services data, at the end of last year, 45 per cent of 66-year-olds were accessing the pension but only 25 per cent were receiving a full pension.

“With the typical super balance at retirement for a household being over $400,000, and most owning their own home, a sizeable majority of new retirees won’t be entitled to the full age pension at the start of retirement,” the report says.

“As super balances continue to grow, most retirees can expect to spend longer in retirement before they receive any Age Pension.”

Are you surprised at these numbers? Have you noticed a shift from pension-reliant retirees to more self-funded retirees?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

RELATED LINKS

Retirees’ costs rise higher than inflation: statistics

Older Australians bear the brunt of cost of living rises.

Is the Age Pension under pressure?

The future of the Age Pension: Is the family home safe from assets tests?

What amount of savings can a pensioner have in the bank?

More than half of Australians who retire today will have enough money to be self-funded rather

Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

Contact:
LinkedIn
Email



SPONSORED LINKS

Sign-up to the YourLifeChoices Enewsletter

continue reading

COVID-19

National Cabinet to fast-track COVID-19 vaccination for over 50s

Australia will fast-track its COVID-19 vaccine rollout for people older than 50 next month, as National Cabinet seeks to reset the...

Health Insurance

Six reasons your health fund won’t give you a better deal

Do you trust your health fund to give you a better deal? If you think you’re paying too much, it...

COVID-19

Monoclonal antibodies useful for fight against COVID variants

Monoclonal antibodies could prove a game changer for COVID-19 prevention after a trial found they reduced the risk of coronavirus...

Entertainment

Friday Funnies: Science says

  Here are five of the funniest jokes of all time. If you disagree, don’t blame us. Professor Robert Dunbar...

Food and Recipes

The Versatile Meatball by Stephanie Alexander

There are so many things that can be done with a ball or patty of minced meat. Flattened, it becomes...

Computers

How targeted advertising works

Do you ever see ads online that seem to be specifically targeting you? Learn why this happens and whether or...

COVID-19

Study finds dogs can detect COVID-19 with 96 per cent accuracy

As if our wonderful canine partners needed to do any more. They already provide unconditional love and unsurpassed companionship, improve...

Food and Recipes

Deep Fried Potato and Beef Kibbeh

Created by chef Dhuha from Eat Offbeat, the New York catering company that employs refugees who've resettled in the city,...

Lifestyle

Convert your manicured lawn into a wildlife retreat

Many take a certain pride in the sight of their perfectly manicured lawn, but Gardeners' World presenter Monty Don is...

LOADING MORE ARTICLE...