Retirees Getting by on Low Incomes

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Retirees Getting by on Low Incomes

The Age

March 16, 2004

The majority of retired Australians are living on a meagre income but that hasn't stopped people leaving work years before the traditional retirement age, a study released found.

Figures that back up the growing concern in Canberra over the economically unsustainable reliance on the pension showed 70 per cent of retirees are getting by on a weekly income of $320 per week or $16,000 per annum, the vast majority of which comes through the age pension rather than superannuation.

And despite inadequate levels of superannuation across the community, females are retiring at an average age of just 41 and males 58.

The AMP-sponsored National Centre for Social and Economic Modelling (NATSEM) income and wealth report found 60 per cent of people who retired in the past year have less than $10,000 in superannuation.

Co-author of the report professor Ann Harding said one third of those who retired on less than $10,000 super are in a situation where their partner also has an extremely low income of less than $20,000 per year.

She agreed there was still a dominant culture of relying on the pension in Australia.

"As a personal choice it may be very sensible to retire early, get your superannuation early in a lump sum, pay off you debt, effectively run down a lot of your assets until you become eligible for the age pension," she said.

"For society that's a very difficult option and of course it's one that the treasurer and the Prime Minister are very concerned about.

"The fiscal implications look very grim, it's very clear that if they are able to increase the private contributions of retirees to their future retirement income then that would be extremely helpful in what will be a very challenging period of trying to pay for age care and health care and pensions over the next 30 years."