Retirement
Fast-forward to 2050: 1 in 2 retirees will be ‘comfortable’
By 2050, half of all Australian retirees will be able to retire “comfortably”, thanks to the maturation of the compulsory superannuation system, a new report has indicated.
Fast-forward to 2050: 1 in 2 retirees will be ‘comfortable’
By 2050, half of all Australian retirees will be able to retire “comfortably”, thanks to the maturation of the compulsory superannuation system, a new report has indicated.
The Association of Superannuation Funds of Australia (ASFA) has released new research that considered the legislated increase of the superannuation guarantee (SG) rate to 12 per cent “would see half of all Australians achieve a self-funded retirement by 2050”.
According to ASFA, as the system matures, a larger proportion of retirees will reach the ASFA comfortable retirement standard benchmark – which currently sits at around $44,200 per year for a single person and around $62,400 per year for couples.
It estimates that around 50 per cent of Australians will reach this result.
On a macroeconomic scale, this would mean national fiscal sustainability would be improved – through less reliance on the Age Pension despite Australia’s ageing population.
ASFA explained that over time, the proportion of retirees that will be eligible for either a full or part Age Pension “is expected to decline”.
In effect, this means that while more people will be drawing on a pension by virtue of the ageing population, they will be drawing on lesser amounts, thanks to superannuation.
“This will counter the pressure of an ageing population on future Age Pension expenditure by government,” it continued.
Assuming that the legislated increase to 12 per cent does occur, ASFA has projected that expenditure on the Age Pension will fall from 2.9 per cent to 2.6 per cent of GDP over the period to 2054-55.
This puts Australia in a much better position than many other advanced economies, the organisation noted.
OECD expenditure on public pensions averages 8.8 per cent of GDP in 2020.
This is projected to increase to 9.4 per cent by 2050.
According to ASFA, some European countries are already spending four times the amount Australia does on pension systems, with these numbers expected to increase even further.
Did you enjoy this article? You may also be interested in:
- How compulsory super champions low-income earners
- Industry super slams government over guarantee freeze
- How to rebuild your super balance after COVID-19
RELATED ARTICLES
About the author
About the author
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more
Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more
Superannuation
Rest super fund reports 11.19 per cent return for 2024
Rest superannuation fund delivered an 11.19 per cent return in its MySuper Growth investment option for calendar year 2024, marking two consecutive years of positive returns. Read more
Superannuation
Actuaries propose three-tier superannuation tax reform
The Actuaries Institute has outlined major reforms to Australia's $4.1 trillion superannuation system, proposing uniform tax rates and new levies on high retirement withdrawals. Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more
Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more
Superannuation
Rest super fund reports 11.19 per cent return for 2024
Rest superannuation fund delivered an 11.19 per cent return in its MySuper Growth investment option for calendar year 2024, marking two consecutive years of positive returns. Read more
Superannuation
Actuaries propose three-tier superannuation tax reform
The Actuaries Institute has outlined major reforms to Australia's $4.1 trillion superannuation system, proposing uniform tax rates and new levies on high retirement withdrawals. Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
