Comfortable retirement a luxury for many
NEW research shows almost half the population retiring in the years through to 2055 will not have enough income to achieve a comfortable retirement, unless current policies are overhauled.
Modelling by actuaries Rice Warner for Industry Super Australia's submission to the Tax Review paints a stark picture.
On average, 63% of single women will fall below the comfortable retirement standard, as will 50% of single men and 45% of couples.
This takes into account their super, the pension and other savings combined, in a fully mature super system.
"One of the main causes is poorly targeted tax breaks on superannuation, which are now wildly out of balance between high income earners and those on medium to lower wages," said David Whiteley, CEO of Industry Super Australia.
"Our analysis of retirement incomes shows current tax breaks flowing to the top 1% of Australian income earners will more than double their retirement income. Perversely, the lowest paid Australians, who receive no tax break, suffer a 14% reduction in their superannuation income.
"As a result, the income of the top 1% of couples retiring in 2055 will be almost 10 times higher than couples at the lowest end of the income scale. This gap is clearly inequitable and unsustainable," Mr Whiteley said.
Meanwhile, tax breaks for middle income earners will increase their retirement income by just a third.
With tax concessions flowing disproportionately to high earning males, the imbalance is already impacting deeply on women who make up the vast number of median to low paid workers.
"We know that 63% of single women will not have enough to retire comfortably under existing policies. However this rises to an alarming 80% when the proposed tightening of the pension asset test is added to the equation," Mr Whiteley said.