Retirement
How to boost retiree savings by 30%
More direct government intervention may be required to better protect, or even bolster, the retirement savings of older Australians, an academic has said.

How to boost retiree savings by 30%
More direct government intervention may be required to better protect, or even bolster, the retirement savings of older Australians, an academic has said.

Academic actuary and associate professor at UNSW business school, Anthony Asher, has penned a dialogue paper in which he raised the idea that there’s a case to be made for compulsory longevity risk management to be added to superannuation products.
The paper, titled “Developing the Retirement Income Framework”, highlights that if the government were to make it compulsory for superannuation trustees to at least offer products to consumers that provide longevity risk cover, Australians could potentially increase their retirement income by as much as 15 to 30 per cent.
According to Mr Asher, “It seems clear that more direct government intervention may be required – just like the introduction of the superannuation guarantee, MySuper and even account-based pensions.”
While they may not be popular, the academic argued that “there is potentially a case for compulsory partial allocation of some members’ superannuation to lifetime income stream products in retirement”.
In the report, the associate professor iterated that modelling shows a 15 per cent to 30 per cent increase in retirement income through use of an appropriate allocation to
suitable lifetime income streams.
He explained that without such products, retirees will either leave significant bequests or run out of money in later life and noted the "particular need to protect longer living partners
with lower personal balances".
He believes that a more efficient management of longevity risk could result in higher living standards in retirement and would better align the superannuation system with its objectives.
It would also help reduce retiree stress around whether or not their savings will last.
Alongside such products, Mr Asher is also an advocate for the provision of low-cost financial advice to help improve the living standards of older Australians.
He highlighted how a new framework could be incorporated into the superannuation system that would require all trustees to include a covenant that would require the offering of “longevity risk-style products and affordable advice to members”.
This could work in a similar way to the advent of income protection insurance and life insurance products that are embedded into super products.
With retirees predominantly just having needs that fall into five general requirements, the associate professor said trustees should be able to offer a range of products to meet those needs and provide advice based on general expectations.
Those five requirements are: a high income, an income that lasts (including for a spouse), a stable annual income, access to enough capital, and a desire to leave a bequest.
At a minimum, the academic has urged funds to consider offering members an appropriate longevity protection product for all or part of their balance, setting out pros and cons, before paying any benefits out to an individual on their retirement.
About the author

About the author


Retirement Planning
1 in 2 Aussies feels unsure about their retirement
With the majority of Australians concerned about their financial future, a superannuation provider has shared six tips to help Australians take control of their retirement planning. ...Read more

Retirement Planning
5 tips for a financially healthy retirement
While it is never too early to start planning for your retirement, it is also never too late, with just five simple steps enough to make a big difference to your financial position and ensure you have...Read more

Retirement Planning
PM unveils $452m funding package following ‘harrowing review’
The federal government has announced that it will spend almost half a billion dollars on immediate measures to help overhaul the aged care sector following the release of the aged care royal commissio...Read more

Retirement Planning
Retirement time bomb requires complex thinking
The majority of Australia’s super assets now sit in the hands of retirees and pre-retirees, but many require more nuanced investment strategies to achieve the lifestyle they want in retirement, a ne...Read more

Retirement Planning
Why some Millennials are struggling to save for retirement
Millennials are struggling to save for retirement as they face challenges that are different from other generations. What are these reasons? ...Read more

Retirement Planning
Retirement Income Review cornerstone ‘not for everyone’
Despite being the cornerstone of the Retirement Income Review, an expert has highlighted that downsizing and withdrawing equity from a property might not be the solution for all older Australians. ...Read more

Retirement Planning
Effective tips that can help Millennials retire faster
Millennials have changed the cultural and societal landscapes of the world. This is unsurprising, given the fact that they are the best educated and most diverse generation in history. ...Read more

Retirement Planning
What you need to know to get ahead financially
Australians looking to get ahead are being advised to analyse their financial situation, set financial goals and reduce debt whenever possible. ...Read more

Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now

Raging floods, the tech stock bubble and the ongoing SG debate
Listen now

Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now

The continued property boom, ethical investing and engaging with your super fund
Listen now

Retirement Planning
1 in 2 Aussies feels unsure about their retirement
With the majority of Australians concerned about their financial future, a superannuation provider has shared six tips to help Australians take control of their retirement planning. ...Read more

Retirement Planning
5 tips for a financially healthy retirement
While it is never too early to start planning for your retirement, it is also never too late, with just five simple steps enough to make a big difference to your financial position and ensure you have...Read more

Retirement Planning
PM unveils $452m funding package following ‘harrowing review’
The federal government has announced that it will spend almost half a billion dollars on immediate measures to help overhaul the aged care sector following the release of the aged care royal commissio...Read more

Retirement Planning
Retirement time bomb requires complex thinking
The majority of Australia’s super assets now sit in the hands of retirees and pre-retirees, but many require more nuanced investment strategies to achieve the lifestyle they want in retirement, a ne...Read more

Retirement Planning
Why some Millennials are struggling to save for retirement
Millennials are struggling to save for retirement as they face challenges that are different from other generations. What are these reasons? ...Read more

Retirement Planning
Retirement Income Review cornerstone ‘not for everyone’
Despite being the cornerstone of the Retirement Income Review, an expert has highlighted that downsizing and withdrawing equity from a property might not be the solution for all older Australians. ...Read more

Retirement Planning
Effective tips that can help Millennials retire faster
Millennials have changed the cultural and societal landscapes of the world. This is unsurprising, given the fact that they are the best educated and most diverse generation in history. ...Read more

Retirement Planning
What you need to know to get ahead financially
Australians looking to get ahead are being advised to analyse their financial situation, set financial goals and reduce debt whenever possible. ...Read more