Finance Your Super ASFA: retirees expect more than the age pension

ASFA: retirees expect more than the age pension

A comfortable retirement?
Retirement expectations are higher than the age pension. Photo: Getty
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The new CEO of the The Association of Superannuation Funds of Australia (ASFA) has made his presence felt in recent days, taking aim at the Grattan Institute’s claims in a Parliamentary submission that the age pension and rent assistance would provide an adequate or acceptable retirement for Australians.

Mr Fahy described the Grattan claims as patronising and poor public policy which, if implemented, would condemn hard-working Australians to a life of near poverty in retirement

“The submission from Grattan, to the Senate Standing Economics Committee Inquiry into the Superannuation (Objective) Bill 2016, is attacking a super system internationally acknowledged as first class and one that is delivering a higher standard of living for retirees,” he said.

Dr Fahy said Grattan’s claim that annual expenditure of $43,372 for a single and $59,619 for a couple at age 65 would deliver a luxurious lifestyle suggests the think tank is out of touch with the reality of living costs in Australia.

“The ASFA comfortable standard is based on a detailed analysis of the level of spending needed to meet the realities of retirement, including: health and aged care with the associated out-of-pocket medical expenses; running a modest car; basic home maintenance; and, being able to run air conditioning in summer and heating in winter,” he said.

“The super system is working to provide more and more Australians with a comfortable retirement as the system matures. This is an excellent public policy achievement particularly when it is done at a fraction of the budgetary impost of systems in most other countries.

“ASFA projections show that those reaching a comfortable standard of living in retirement will increase from around 20 per cent now to 40 per cent of Australians by 2040, based on current settings and including the increase in Super Guarantee payments to 12 per cent.

“With increasing longevity, we want Australians to be healthier and more active in their retirement, not poorer and sicker.”

Dr Fahy said ASFA believes Australians are justifiably worried about longevity and aged and heath care costs in retirement and superannuation is a big part of the solution.

“Super makes a substantive difference to retirement incomes, including for low income earners,” he said.

Dr Fahy said Australians don’t aspire to retire on the age pension and Grattan’s views fly in the face of a long tradition of a progressive improvement in living standards for successive generations.

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