The amount retirees draw down their super is rational and does not point to unnecessary frugality, according to Rice Warner.
In an analysis, the research house said the Retirement Income Review’s suggestion that retirees did not draw down enough of their super was only based on small studies which coincided with high investment returns.
Pointing to data of those who were aged 65 to 70 in 2000, Rice Warner said there was a trend in Age Pension dependency of the surviving pensioners.
“The trend shows that people do spend quite a bit of their accumulated superannuation early in retirement – more self-funded retirees shift to part pensions over time, and more part pensioners shift to become full pensioners,” it said.
“Overall, the behaviour appears rational and does not point to unnecessary frugality.”
People aged 65 to 70 in 2000
Source: Rice Warner
Rice Warner said while the overall dependency on the Age Pension increased with age, there were steps that could be taken to improve expenditure patterns in retirement.
It said some steps included:
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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