An increasing proportion of retirees will be self-funded over the decades ahead, including many who choose self-managed superannuation funds (SMSFs) as their primary retirement savings vehicle, according to findings in the intergenerational report (IGR).
The Association said increased voluntary savings would help boost the proportion of self-funded retirees, which would help reduce the cost of age pension payments.
John Maroney, SMSF Association chief executive, said: “The IGR clearly illustrates the importance of building superannuation savings to offset the growing liabilities related to an aging population”.
However, the Association said affordable and accessible financial advice was crucial.
“One of the short-term reforms that will help boost productivity and help encourage additional savings is to ensure that all Australians have access to high-quality financial advice,” Maroney said.
“This will help us meet many of the challenges illustrated in the intergeneration report.”
Dr Deborah Ralston, Professorial Fellow of Monash University and chair of the SMSF Association public policy committee, said: “As the IGR points out, with reduced migration there will be a higher proportion of older Australians in the population going forward.
“However, with increasing longevity, and more flexible working arrangements, many people will elect to work for longer.
“Reliance on the age pension will reduce as super balances grow, and at 2.4% of GDP, Australia has one of the lowest cost pension systems in the OECD.”
Treasury projections suggested that the median superannuation balance at retirement would increase from around $125,000 in 2020/21 to around $460,000 in 2060/61.