The first in-depth study of Retirement Account Drawings in Australia was initiated by the Retirement Incomes Working Group of the Institute of Actuaries of Australia.
A majority of retirees display very conservative superannuation spending habits, but an increasing number of retirees are withdrawing more of their superannuation than is sustainable and many will outlive their savings, according to the largest ever Australian-first research by Plan For Life, released by the Actuaries Institute Retirement Income Working Group.
There will be an increasing number of retirees in the future who will run down their superannuation accounts completely, by drawing down more than 10% of their balances (the legislated minimum starts at 4% for those under 65 and rises at higher ages, exceeding 10% for those over 90), putting further pressure on the Federal Budget and the Age Pension.
Simon Solomon, Founder of Plan for Life, said: “Previously data at this level of detail had to be estimated. We wanted to see what the numbers really showed. The data confirms some pre-existing views but also includes some surprises. We are now getting a much clearer picture of retiree’s behaviour. Our research is ongoing. Examination of differences between accounts held by males and females, as well as changes in pension drawings in the two most recent years – 2015 and 2014, and then 2016 - will enable more information to be drawn from the study.”
The Plan For Life "Retirement Account Drawings in Australia" report has been compiled from 10 years of data across the spectrum of corporate, retail and industry funds. It was commissioned by the Retirement Incomes Working Group (RIWG) of the Actuaries Institute. The study has been designed to unearth very detailed information about superannuation members in part or full retirement.