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Part-pension still vital in retirement equation
A 50-fold difference exists between those in the top five per cent income bracket and about to retire and those in the bottom five per cent, according to new white paper research conducted by Rice Warner and released by the Actuaries Institute.
The research has provided a clearer picture of how the Australian superannuation system is working with respect to providing retirement incomes adequacy and largely concludes that while the superannuation guarantee is serving its purpose, access to the part age pension remains critical to many retirees.
Looking at the differential between those in the top and bottom brackets, the research said this reduced to 10-fold for those who will retire in 30 years' time, confirming the importance of the Superannuation Guarantee in providing an element of social equity.
However in discussing the research, Actuaries Institute chief executive, David Bell, said that it showed that the least wealthy sections of the community, both now and in the future, would continue to be entirely dependent on the age pension to maintain even a modest lifestyle.
The white paper noted that receiving at least some of the age pension would remain very important for median wealth couples — a group which had been the focus of policy tinkering by successive governments.
"As this group enters retirement, removing part payments will jeopardise their comfortable standard of living," the white paper analysis said.
The white paper also pointed to continuing disadvantage of women with respect to retirement incomes adequacy, particularly single women.
It said single women were likely to experience the worst outcome in retirement compared to couples and single men, with many unable to achieve a comfortable standard of living.
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