Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Retirees at greater risk of depleting super

The prevalence of Australians outliving their super is expected to rise, placing greater pressure on the age pension, according to a recent study.

The study, released last week by the Actuaries Institute, predicts that increasing numbers of Australians will completely deplete their superannuation fund before their deaths.

“This is because, between the ages of 75 and 85, about a fifth of balances are being drawn down at more than 10 per cent of their balances, which is not sustainable for those who live longer than average,” the institute said in a statement.

However, the report also found that retirees are increasingly worried about the longevity of their super, with most “very cautious” when it comes to spending.

With reduced returns and the Australian age expectancy to rise, it is not surprising that older Australians are feeling the pinch, according to a paper released by traded funds manager Betshares.

“This prospect is a growing reality for Australians, due to rising life expectancy and lower returns on safer assets than in previous years,” Betashares’ chief economist David Bassanese said.

“This is giving rise to ‘longevity risk’ or the risk of outliving your retirement nest egg.”

With some retirees unable to wait out the equity market slump, they may end up compensating by taking on greater risk, Mr Bassanese said.

“The trade-off between investing safely and preserving one’s investment nest egg versus taking on more risk in the search for higher returns is becoming much more acute.”

Retirees at greater risk of depleting super
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
just wondering - Fintech advisers mostly appear to invest in a bundle of ETF's. You don't mention about the additional potentials risks of ETF investments over direct.......
Mort Schwartzbord - It was always apparent from the initial announcement by Labor that the abolition of negative gearing claims would apply to all investments. This will.......
Maureen - Perhaps the change is a reflection of age. Y0unger people are not as charitable as previous generations. The older people who used to give are now.......
Ian S Falconer - The Grattan Institute have again demonstrated that they are totally out of touch with the real world.
There are 'ooo's of self employed people who.......