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Retirement Income

  • Hazel BatemanEmail author
  • Rafal Chomik
  • John Piggott
Chapter
Part of the International Perspectives on Aging book series (Int. Perspect. Aging, volume 16)

Abstract

Providing a population with some form of income security for the later stages of their lifespan has been a part of the political agenda in developed economies for more than a century. This chapter describes and assesses Australian retirement income policy. As in other countries, policy has changed greatly in past decades and is expected to continue to evolve. The unique design of Australia’s system, comprising the ‘three pillars’ of a means-tested Age Pension, mandatory superannuation under the Superannuation Guarantee, and other, voluntary long-term savings, compares well internationally. Replacement rates are below the Organisation for Economic Co-operation and Development (OECD) average but are expected to improve with policy reforms to increase the mandatory superannuation contribution rate. Old-age poverty after housing costs is low by international standards. Superannuation assets are among the highest in the world, and while the administrative costs are high, there are policies in place to help resolve the administrative inefficiency. Spending on age-related pensions is approximately 3.6 % of GDP, among the lowest rates in the OECD, suggesting that the system is far more sustainable than many others. However, future challenges and opportunities are also highlighted, particularly those relating to tax, drawdowns, the challenges associated with choice, and mature-age labour force participation.

Keywords

Retirement Retirement income policy Income security Superannuation Age pension Defined contribution Defined benefits 

Notes

Acknowledgement

Support from the ARC Centre of Excellence in Population Ageing Research (CEPAR) (project number CE110001029) is gratefully acknowledged.

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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.ARC Centre of Excellence in Population Ageing ResearchSchool of Risk and Actuarial Studies, University of New South WalesKensingtonAustralia
  2. 2.ARC Centre of Excellence in Population Ageing ResearchSydneyAustralia
  3. 3.ARC Centre of Excellence in Population Ageing ResearchSchool of Economics, UNSW Business School, University of New South WalesKensingtonAustralia

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