Towards a superannuation system fit for the future

Summary

This study focuses on data led understanding of savings habits, on the development of a stochastic superannuation model and the proposal of alternative post retirement solutions.

Key researchers

Project background and aims

The growth of the Australian superannuation system over recent decades has been a great success story for Australia. However, in the context of funding for retirement the system is still in its infancy and more importantly it has still to be properly tested during the decumulation phase. With increasing longevity now being a feature of developed countries around the world, concern is growing as to whether the superannuation system as it stands will provide the necessary level of self-sufficiency for retirees in the future for the Australian retirement income system to be sustainable. The overall aim of this project is to better understand how individuals currently interact with the superannuation system in Australia and following this analysis to propose a set of viable superannuation pension solutions that are specifically designed to provide sustainable retirement incomes for superannuants in combination with the Age Pension.

Findings

The findings include:

  • Single households with no superannuation had median assets of $49,000 in assets such as savings, securities and other managed investments compared with a median value of $117,000 for couples in the same situation.
  • Half of single households had less than $48,000 in the above non-super assets. This compares with $107,000 for couples.
  • For those that did have superannuation, median values of superannuation assets were also different, with singles holding a median balance of $220,238 compared with $354,744 for couples.
  • Of those whose assets were examined in the study, almost 60 per cent of singles were homeowners and 87 per cent of couples.

Output

Funding information

  • Australian Research Council (ARC) Research Grant Linkage Projects #LP160101038
  • Towards a superannuation system fit for the future" 2016-2019