While superannuation balances are growing and the super guarantee rate will climb to 11.5 per cent in July, lots of Australians are still left having to make do with less than they would like in retirement.

But there are things you can do to stretch your retirement funds and enjoy a better life after work finishes.

Two out of three people are drawing more than the minimum required amount from their super in retirement and 90 per cent of men and 80 per cent of women have spent all their super when they reach their life expectancy age, says a new report from Super Members Council of Australia (SMCA).

That report draws largely from the industry fund superannuation world, and ignores the larger balances typically carried by self-managed super funds and choice segments in the for-profit retail sector.

Taking more than necessary

Those who are drawing down more than required are beating the minimum drawdown levels by an average of 40 per cent. And these high drawdown levels are occurring even among those who have already withdrawn lump sums.

Recent work by consultants Deloitte found that the vast majority of superannuation withdrawals – 64.7 per cent – are accounted for by account-based pension payments with only 20.7 per cent of retirement balances withdrawn in lump sums.

The remainder is paid out in death benefits to heirs.

The high level of account-based pension payments imply that people are not blowing all their cash on a renovation or a caravan but are looking to extend super as far as possible through retirement.

“While most Australians approaching retirement expect to finish working at 67 (at which point they are eligible for the age pension), one-third have accessed their super by 63 and one in four are still working in their early 70s,” SMCA found.

All that suggests that people are not able to work for as long as they would like, and that a significant number don’t have a healthy enough nest egg to retire on when the time comes.

The SMCA found the median balance at retirement was $200,000, but it expects the median earning 30-year-old to retire with $500,000.

In both situations it is likely that retirees with median balances would finish up taking a part age pension on retirement.

Rising debt

But while superannuation balances are increasing, so is the debt that people retire with. SMCA found that 40 per cent of retirees finish their working lives with mortgage debt whereas 20 years ago the figure was only 16 per cent.

And for a significant number of people the growth in their super balances is not outweighing the growth in mortgage burdens. The survey found that if those retiring with mortgage debt paid it all off at retirement, 40 per cent and 33 per cent of couples would exhaust their super as a result.

There are some pretty hard equations when it comes to retirement; what it comes down to is – do you have enough to fund the lifestyle you want? However, Thaborjan Rasiah, principal of Rasiah Private, says people often go into retirement without knowing what those equations look like.

“It is hard to know how long your super will last without doing a calculation that will demonstrate that,” Rasiah says. “Making that calculation is vital as you move to retirement because you need to know how long your money will last.”

Financial planners and super funds can help you work out how far you can stretch your super and give you choices about how much you want to spend.

SCMA chief executive Misha Schubert called on regulators to ensure adequate financial planning was available to retirees. “Retirement is changing and super in retirement needs to change with it,” Schubert said.

“There is a huge appetite for high-quality, low-cost and no-cost advice to help people plan wisely for retirement,” Schubert said.

Low income boost

For those at the lower end of superannuation savings and earnings SCMA has recommended a reform to what is known as the low-income super tax offset – or LISTO. It enables people earning up to $37,000 a year to get a tax offset of up to $500 to ensure they are not paying more tax on super than their wealthier counterparts.

SCMA has called for the upper income limit for LISTO to be raised to $45,000.

SMCA modelling has shown that this increase would deliver an extra $440 annually to 1.2 million low-income earners in 2025-6.

“Over 60 per cent of this will flow to low- and middle-income women. This would increase the retirement balance for a female in the 20 age percentile by $20,000 [in today’s dollars],” SMCA found.