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
About the author
About the author
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Super returns fall into the red for FY22
Unless a recovery takes place in the coming weeks, super funds will experience their fifth negative financial year since the introduction of compulsory super. Read more
Superannuation
Could the Super Home Buyer Scheme ‘torpedo’ Aussie super savings?
Industry Super Australia has argued that the scheme would force funds to hold more cash. Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Super returns fall into the red for FY22
Unless a recovery takes place in the coming weeks, super funds will experience their fifth negative financial year since the introduction of compulsory super. Read more
Superannuation
Could the Super Home Buyer Scheme ‘torpedo’ Aussie super savings?
Industry Super Australia has argued that the scheme would force funds to hold more cash. Read more