More Australians risk using up their super before they die, says new report
Thursday, 4 August 2016
Two reports initiated by a UNSW Business School Associate Professor have found a growing number of Australians were at risk of using up all their superannuation before they die.
Dr Anthony Asher, Postgraduate Actuarial Program Director at UNSW Australia, said “We need to understand why some people appear to be spending too much and what happens when the money runs out. It could be intentional as their income needs decline such that the old age pension is sufficient [or] it could be because they have lost money due to dementia, financial abuse or poor decision making.”
Research prepared for the Actuaries Institute highlighted that, one in five retirees aged between 75 and 85 were drawing down 10 per cent or more of their principal a year. "Their spending will have to decline fairly quickly over time or they will run out completely and face a drop to the old age pension" the reports said.
Dr Asher, the convenor of the Actuaries Institute's retirement incomes working group, explained only people on the old-styled defined benefits superannuation schemes were guaranteed an income until they died.
Dr Asher, said while compulsory superannuation was a good concept it could be fine-tuned to work better. "There is also a need for longevity insurance, the opposite of life insurance, to cover people against living longer than they had expected or budgeted for."
Media contact: Ibrar Khan: 02 9385 9887 | firstname.lastname@example.org
Associate Professor, Ethics and Grievance Officer, Director of Research - Business for the Centre for Law, Markets and Regulation
School of Risk & Actuarial