Key points from superannuation report

An investment returns statement with ball point pen. Note shallow depth of field focus on ball point pen.

(Australian Associated Press)

KEY POINTS FROM PRODUCTIVITY COMMISSION’S REPORT INTO SUPERANNUATION POLICY:

* Gradually increasing the preservation age to 65 would deliver the budget $7 billion a year in 2055, mainly because of tax revenue from wealthier households.

* Households would be likely to delay their retirement by about two years and will have super balances about 10 per cent larger when they retire.

* There will be a modest two per cent increase in the workforce participation of older Australians in 2055, mainly among those with higher wealth or near retirement.

* Changing the preservation age will have little, if any, impact on many older Australians who retire involuntarily.

* An appropriate safety net would have to be a priority for those who become involuntarily retired.

* Less than 30 per cent of superannuation benefits are taken as lump sums.

* When lump sums are taken they’re most frequently used to pay down debt, invest in income stream products and buy durable goods that are used through retirement.

* Any changes to the system should cater for diverse circumstances, because “one size” does not fit all.

(Source: Productivity Commission research paper Superannuation Policy for Post-Retirement).

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