The majority of Australians entering retirement are now officially self-funded, new research has found, in proof that the superannuation system is working for the current generation of retirees.
Research from Challenger showed that in December 2018, only 45 per cent of 66-year-old were on the Age Pension and only 25 per cent were on the full Age Pension. At the same time, there was over $800 billion in the super accounts of members over 65-years-old, representing over 28 per cent of total assets in the superannuation system.
Older retirees were more reliant on the Age Pension however, with over 80 per cent of 80-year-olds receiving some form of the Government payment. Across all ages groups though, the average superannuation balance was growing.
As at June, last year, there were 13 large Australian Prudential Regulation Authority (APRA) funds that each had more than $5 billion in the retirement phase. Retirees in industry funds may have fared slightly better than those in their retail counterparts, however; while five industry funds had more than $5 billion in retirement compared to 13 retail funds, the average balance in the former ($305,000) was nearly 20 per cent than in the latter ($255,000).
The research also found that at a household level, most people entered retirement as a couple and the typical superannuation balance of a couple starting retirement today was $400,000.
According to Challenger, these figures were evidence that, despite debate over the success of the superannuation system as it heads towards full maturity and greater numbers of baby boomers hit retirement age, super was working.
“Super is working on a mass scale, even though it does leave a minority of people behind. Contrary to many opinions, super is reducing reliance on the Age Pension for the large majority of people entering retirement,” the report said.