Retirees face lifestyle shock

CPA Australia has released its third Superannuation – The Right Balance? report, which evaluates the impact of Australia’s simplified superannuation changes from 1 July 2007.

The research shows that Australia’s superannuation system has improved significantly since the first report in the series was commissioned in 2001 and updated in 2004. Superannuation is now more accessible, benefit options are more flexible and incentives for increasing retirement savings have improved.

However, the research also makes it clear that there is no room for complacency, either for policy makers or the general public as:

· The benefits of the recent changes apply mostly to people on average or higher incomes;
· Adequate retirement savings will still only be a reality under ideal conditions where individuals enjoy 40 years of compulsory superannuation contributions and are in a position to make voluntary savings; and
· The majority of Australians will have less income in retirement than they have been accustomed to during their working lives.

“More needs to be done for Australians who don’t fit the mould,” says Michael Davison, CPA Australia’s superannuation policy adviser.

“Women, people with broken work patterns, those forced into early retirement, and non-home owners will find it difficult in retirement.

“We believe there are opportunities for the Government and the superannuation industry to work together to address these needs.”